‘Unfair’ Chase Bank Bad Check Junk Fees Are Illegal, Class Action Claims

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A proposed class action lawsuit alleges JPMorgan Chase Bank has unfairly assessed fees as penalties for faulty checks that the bank’s depositing customers “had no hand in issuing.” 

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The 34-page Chase Bank lawsuit accuses the bank of acting in a manner that is “unfair, oppressive, and against public policy” by penalizing consumers who could not have reasonably known that a check they deposited was bad. The suit contends that the bank itself all but admitted that its “Deposited Item Returned Fee” was “unfair and predatory” when it quietly removed its disclosure about the “junk fee” penalty last March. 

“Plaintiffs were shocked when they were charged these Fees because they did nothing wrong, yet were penalized by Chase,” the case reads. “There was nothing Plaintiffs could do to avoid—or even anticipate—a Deposited Item Returned Fee assessed by Chase at the time the deposit was returned.” 

Per the complaint, guidance from the Consumer Financial Protection Bureau (CFPB) has reaffirmed the illegality of Chase Bank’s Deposited Item Returned Fee policy. The CFPB released in October 2022 a compliance bulletin in which it stressed that it is unfair to have a blanket policy of charging Deposited Item Returned Fees when a check is returned unpaid, no matter the circumstances or patterns of behavior on the account, the case shares. 

The lawsuit explains that a Deposited Item Returned Fee would be charged in the event a deposited check cannot be processed against the originator’s account. The suit emphasizes that the litany of reasons why a check someone received would bounce lie almost entirely out of the depositor’s control. 

“The reason could be insufficient funds, a stop payment order issued by the check writer, a closed or foreign account, or even a minor discrepancy on the check itself. Even though the depositor has no control over the check, the Deposited Item Return Fees charged can range from $5 to over $30 and often vastly exceed the actual cost of processing the returned check.” 

According to the case, disclosures for Deposited Item Returned Fees, widespread throughout the banking industry, are often buried in “dense and convoluted legal agreements or associated fee schedules,” making it difficult for consumers to learn about the penalties until they are actually charged one. The lawsuit contests that such fees are “nothing more than veiled revenue-generating tools that penalize innocent depositors for the actions of others.” 

The five plaintiffs in the suit each claim to have been charged a $12 fee by Chase after attempting to deposit a check that was returned unpaid. 

The lawsuit looks to cover all consumers who, during the applicable statute of limitations period, had or have accounts with Chase and were charged a Deposited Item Returned Fee by the bank. 

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