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07-21-2015, 02:03 PM #1
Citibank to refund $700 million for illegal credit card practices
Citibank to refund $700 million for illegal credit card practices
A man walks past a branch of Citibank in San Francisco in 2014. The bank has agreed to refund about $700 million for illegal credit card practices.
(Eric Risberg / AP)
By JIM PUZZANGHERA contact the reporter
Citibank has agreed to refund an estimated $700 million to about 8.8 million credit card customers for deceptive marketing, billing and other illegal practices, federal regulators said Tuesday.
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In addition to the refunds, Citibank was fined a total of $70 million by the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, which regulates national banks.
Bank of America to pay $772 million for illegal credit card practices
The consumer bureau has been cracking down on deceptive marketing and billing practices by credit card issuers of so-called add-on products, such as identity theft monitoring and protection programs that cover payments if a person loses a job or is seriously injured.
"We continue to uncover illegal credit card add-on practices that are costing unknowing customers millions of dollars," said Richard Cordray, the bureau's director.
Citibank's violations took place from at least 2003 until 2012, the bureau said. They included misrepresenting the costs and benefits of products and charging consumers for services they did not receive.
Citibank and its subsidiaries Citicorp Credit Services Inc., and Department Stores National Bank also did not disclose to customers making payments over the phone for delinquent accounts that they would be charged $14.95 for the expedited service.
Parent company Citigroup said it had fully cooperated with the regulators and set aside money to pay for the settlement. The company said it already had stopped selling the products and no longer charges the fees for expedited payments by phone.
The company said it has been refunding money since 2013 and "will continue to notify and refund affected customers."
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"Affected customers will automatically receive a statement credit or check and those no longer with Citi who are eligible will be mailed a check," Citigroup said.
Citibank agreed to refund about $479 million to approximately 4.8 million customers for deceptive marketing practices.
The company also will refund $196 million to about 2.2 million customers who paid for products such as credit monitoring but did not receive the promised services and $23.8 million to 1.8 million customers who were charged expedited payment fees.
http://www.latimes.com/business/la-f...721-story.htmlNO AMNESTY
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