Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—W.D. Wash.: Chase not liable for disputed credit card charge investigation, (Feb 28, 2014)

By Jody Coultas, J.D.

A credit card holder failed to state a Washington Consumer Protection Act (CPA) claim against Chase Bank USA, N.A. for allegedly deceptive business practices in investigating charges, the federal district court in Seattle has held (Roundtree v. Chase Bank USA, N.A., February 26, 2014, Pechman, M.).

The card holder alleged that while at a nightclub in Spain, his Chase credit card was charged without his authorization three times for around $42,000. Chase conducted an investigation into the charges and found that they were authorized based on the signatures on the transaction slips matching what Chase had on file. The card holder alleged that Chase’s investigation was cursory, and that Chase’s deletion of telephone calls from card holders and asking for the last four digits of card holders’ social security number were deceptive.

To state a CPA claim, the card holder was required to show (1) that an unfair or deceptive act, occurring in trade or commerce, impacted the public interest, (2) that the act caused injury to the card holder, and (3) that the injury was linked to the deceptive act. The alleged deceptive act must have the capacity to deceive the public.

Chase had not violated the CPA, according to the court. The card holder did not provide any authority to support his argument that Chase’s investigation was conclusory or that Chase should adopt a more thorough process that would take claims against the same merchant into account. Chase’s investigative process was not deceptive in any way. Chase’s failure to retain phone calls was also not deceptive, and there was no evidence that Chase sought to destroy evidence. Finally, Chase’s request for social security information was not deceptive in light of Chase’s personal security policy. Chase’s website states that card holders will not be asked for personal security information, such as social security numbers. However, the card holder could not show that Chase’s identification of the card holder based on four digits of his social security number was deceptive or how it caused an injury.

The card holder’s negligence, fraud, negligent misrepresentations, and fiduciary duty claims were dismissed as Chase had no duty to the card holder outside the card member agreement, according to the court. The disputed issues were covered by the contract, and tort claims related to a contract that do not arise from a tort duty existing independently from the terms of the contract are barred. The card holder’s Fair Credit Banking Act and breach of contract claims survived Chase’s motion to dismiss.

The case is No. C13-239 MJP.

Attorneys: Arnold Michael Willig (Hacker & Willig) for Brian C. Roundtree. David R. Voyles (Lane Powell PC) for Chase Bank USA.

Companies: Chase Bank USA, N.A.

Cases: StateUnfairTradePractices WashingtonNews