Citibank Ordered to Pay $768M for ‘Deceptive’ Practices
The CFPB said Citibank’s “deceptive” and illegal practices affected some 8.8 million customer accounts between 2000 and 2013.
In some cases, telemarketers told customers they had a free 30-day trial, but still charged a fee, or didn’t explain when a customer had to cancel the service before being assessed a fee. In other cases, Citibank offered credit monitoring, but failed to provide the service as explained.
“We continue to uncover illegal credit card add-on practices that are costing unknowing consumers millions of dollars,” said CFPB Director Richard Cordray. “In our four years, this is the tenth action we’ve taken against companies in this space for deceiving consumers. We will remain on the lookout for similar conduct and will address it as we find it.”
The CFPB ordered Citibank to pay $479 million to about 4.8 million customer accounts for deceptive marketing practices, $196 million to 2.2 million accounts enrolled in credit monitoring services and $23.8 million to 1.8 million customers who paid unnecessary expedited payment fees. Additionally, Citibank must pay a $35 million penalty to the CFPB, as well as a $35 million fee to the Office of the Comptroller of the Currency (OCC).
Citi issued a statement saying it “cooperated fully with the CFPB and OCC and has taken extensive steps to address each issue that affected customers.
“Citi previously discontinued sales of the products included in the agreements, which include credit-monitoring and debt-protection products and wallet protection services, and no longer charges expedited pay-by-phone fees.”
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