Chase’s Opt-Out Notice Misleads Customers Into Canceling

Earlier this month, Chase sent out a change of terms notice which mislead some customers into canceling their accounts by accident.

The letter indicated Chase was changing the default APR to 32.4% (up from 29.99%). The notice said customers could send in a letter and opt-out of the changes.

Acting on Consumerist advice, Reader Ed wrote such a letter and went to DisneyWorld, where he found his card denied when trying to pay for fish and chips at the English Pub in Epcot.

We called Chase for clarification. They told The Consumerist that customers need to indicate in the opt-out letter that the account should remain open, otherwise it will be closed by default. Nowhere on the letter does it say anything to this effect. Here’s the call.

Misleading! Shame! Fire the copy editor! Call transcript, Ed’s letter, and a reprint of Chase’s terms of service change notice, inside… — BEN POPKEN


Call Transcript

    CHASE: Card services… please enter the last four digits of your account number.

    CONSUMERIST:Chase… if you stay on the line, you are consenting to recording this call. Just want to let you know.

    KELLEY: Thank you for calling credit card services, my name is Kelly, may I have your name please?

    CONSUMERIST: Hi, this is Ben Popken.

    KELLEY: Thank you. And Mr. Popken, may I have your 16-digit credit card number please?

    CONSUMERIST: Oh, I don’t have a card with you, but I have a question about your terms on your cards. I’m calling on behalf of a relative, and I’m just trying to get something cleared up. If that’s okay.

    KELLEY: Ok. I’ll do the best that I can.

    CONSUMERIST: Ok. Alright. There was a notice sent out earlier this month. It was about a change in terms and right to opt out. Are you familiar with this?

    KELLEY: It depends on what it’s opting out from.

    CONSUMERIST: Ok, well, there was a change in terms and right to opt out, there was a change in the default APR.

    KELLEY: Mhmm. Oh…mhmm.

    CONSUMERIST: And… it was going up to 32.4%…

    KELLEY: Yes.

    CONSUMERIST: And then there was various other event changes and whatnot. And then there was a section on the right to opt out, and, I have the notice in front of me, and it said that if you sent in a letter, saying that you didn’t want to accept the changes, then you could opt out. And then it also said if your account was open, it would still be available for your use. So, if someone sent in such a letter, what happens? BasicallKey. What would Chase do?

    KELLEY: Alright, now for that opt-out, let me pull up default rate, let me see what that would be. Let’s see. Because normally, when you opt out of anything we send you, it means the account is going to be closed. If you opt out of the change. So if it’s saying the account would remain open, that I need to look up. Because I’m not familiar with that being one of the policies for it.

    CONSUMERIST: Ok.

    KELLEY: I just want to make sure I give you the right information.

    CONSUMERIST: Sure.

    KELLEY: With this standardization notice you can opt out of the change without closing the account, cause at this time we normally do not charge more than a 29.99% variable. And that is probably what the account is at now as far as what the default rate would be. Is the 29.99% variable. So at this time, we’re still allowing the optout from the change. Because its just the default rate.

    CONSUMERIST: Mhmm. Ok.

    KELLEY: And so that’s why we’re able the account to remain open. Now, in the event we change it, and that would be what the rate would go to, then you would have to optout, and it would be a closed account if you wanted to opt out, before the date. But in this case, the account can remain open with opting out from the changes.

    CONSUMERIST: Okay. So…

    KELLEY: But if you do send a letter to do that, you do need to specify that you want to kee the account open. Cause if you don’t, they’ll close it.

    CONSUMERIST; Oh…okay. Ho. Okay, yeah, Cause my relative did send such a letter, and they wanted to keep the account, but it got closed on them. Then I would suggest, maybe for the suggestion box, add a part in there that says, “make sure to specify that you want to keep the account open.” Because otherwise, I’m not seeing here anything that says if you don’t, we’ll close the account.

    KELLEY: Mmmkay.

    CONSUMERIST: In fact, it says, you’re lead to think that, oh, I can just send in the letter and the account remains open. And everything’s cool.

    KELLEY: Alrighty. I don’t have a copy of the letter so that’s good for me to know, so I apprecaite that information.

    CONSUMERIST: Uhh… okay….yeah, a little misleading there. Ok, well alright, thanks for the clarification.

    KELLEY: You’re very welcome.

    CONSUMERIST: Have a good day.

    KELLEY: Thanks, you too.

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Ed writes:

    “Well, I listened to the sages at Consumerist and wrote a letter to Chase opting-out of their proposed changes to our “contract” which raised the default APR to the usurious 32% level, not to mention the ridiculous privacy changes. According to your report the card would not be canceled. I guess unless you’re in the middle of DisneyWorld with your family when the card was denied at the English pub in Epcot. I called Chase and they told me that since I opted-out, they canceled my account. No phone call to a valued customer, no letter from an annoying “retention counselor”, nothing. I average probably $5K per month on that card and only got it for the Continental miles, but you’d think they’d make some kind of effort to discuss the matter. Just wanted to warn the rest of the teeming millions out there.”

Previously: Beat Chase’s New 32.4% Default APR