The Richmond Register

Local News

December 29, 2007

Woody’s suing bank for alleged unfair practices

A Richmond restaurateur is suing J.P. Morgan Chase bank for alleged unfair business practices involving insufficient funds fees.

Andrew Jones, owner/operator of Woody’s on Main Street, filed the suit Dec. 19 in Madison Circuit Court alleging a violation of duty to fair dealing and good faith, violation of fiduciary duty, violation of Kentucky’s Consumer Protection Act, violation of Kentucky law against predatory lending practices and charging insufficient funds fees which were “grossly excessive and unconscionable and tantamount to penalties or unreasonable liquidated damages proscribed under contract law,” the suit states.

Jones previously worked with Chase’s Madison County bank branches in a “bank-depositor” relationship, the lawsuit states. In April 2004, Jones “unexpectedly encountered financial difficulties which caused him to experience a cash flow problem.” As a result of the cash flow problem, Jones’ account became overdrawn, according to the lawsuit.

“At that time, the defendant (Chase) agreed to and did commence to pay (Jones’) insufficient funds checks and as a result of this special relationship, (Jones) trusted and relied on (Chase) for financial assistance,” the lawsuit states. “On or about February 2006, (Jones) discovered that (Chase), rather than paying checks that arrive on the same day in the order they were received, was posting the checks in the order of highest to lowest dollar amount, thereby maximizing the amount of insufficient funds fees charged the plaintiff.

“The plaintiff also is informed and believes that at the same time that (Chase) was assessing unwarranted insufficient funds fees, it was warehousing credit card receipts belonging to (Jones) in a separate account, thereby depriving (Jones) of those deposits and maximizing the amount of insufficient funds fees charged (to Jones),” the lawsuit states.

Berea Attorney Roger M. Oliver, who is representing Jones, said the alleged violations were occurring over the nearly two-year relationship period, but Jones was unaware of it until he began using Chase’s Web site last February to manage his account online.

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