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Citibank is in hot water for illegal credit card practices.
As a result of deceptive marketing and unfair billing of credit card add-on products and services, Citibank has been ordered to refund $700 million to 8.8 million of its credit card customers, according to the Consumer Financial Protection Bureau. Citibank must also pay a $35 million penalty to the CFPB.
“We continue to uncover illegal credit card add-on practices that are costing unknowing consumers millions of dollars,” CFPB director Richard Cordray said in a statement. “In our four years, this is the 10th 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 said Citibank’s illegal credit card practices, taking place mainly between 2000 and 2013, include misrepresenting costs and fees for coverage, misrepresenting product benefits, employing illegal processes in enrollment, misrepresenting or omitting information about eligibility, charging consumers for benefits they didn’t receive, failing to provide product benefits, and deceptive means of collection.
The $700 million in refunds will be doled out to consumers as follows: $479 million to 4.8 million customers for deceptive marketing or retention practices, $196 million to 2.2 million consumers who were charged for credit monitoring products that they didn’t receive, and Citibank subsidiary Department Stores National Bank will provide $23.8 million in refunds to 1.8 million consumers who were charged expedited payment fees on delinquent accounts.
The CFPB said Citibank credit card customers may be eligible for a refund if they paid for credit and identity monitoring, credit protection products, or an expedited payment fee. Citibank will notify affected customers directly. In general, consumers who signed up for these products and services after Jan. 1, 2009, are eligible for a full or partial refund.
If you’re still not sure whether you are eligible for a refund, you can contact Citibank at the number on the back of your credit card, according to the CFPB. If you are not satisfied with Citibank’s response, you can submit a complaint to the CFPB online or by calling 855-411-2372.
The CFPB is also warning affected consumers to beware of scammers that claim they can obtain a refund for you from Citibank.
When large numbers of consumers get refunds, scammers sometimes pop up. The scammer may charge you a fee or try to steal your personal information. If someone tries to charge you, tries to get you to disclose your personal information, or asks you to cash a check and send a portion to a third party to “claim your refund,” it’s a scam. Please call [the CFPB] at 855-411-CFPB (2372) to report the scam.
The CFPB has previously fined Capital One, J.P. Morgan Chase, American Express and Bank of America, among others, for the deceptive marketing and billing practices of credit card add-on products.
Have you encountered any of the practices addressed by CFPB’s latest enforcement action? Share your comments below or on our Facebook page.