The U.S. Consumer Financial Protection Bureau said Citibank has agreed to pay about $700 million in refunds for practices that include unfairly billing consumers for credit card add-on products, deceptively marketing those products, and deceptive collection practices.
About 7 million consumer accounts were affected by Citibank’s “deceptive” marketing, billing, and administration of debt protection and credit monitoring add-on products, the Bureau said. A Citibank subsidiary also deceptively charged expedited payment fees to nearly 1.8 million consumer accounts during collection calls. Citibank and its subsidiaries will pay $35 million in civil money penalties to the CFPB, under the consent order.
The CFPB says that if you were among the millions of people affected, Citibank should have already notified you, or will notify you directly. You do not have to take any action. If you have questions about whether you are entitled to a refund, you can contact Citibank at the number on the back of your credit card.
“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.”
Generally, consumers who were signed up for these products on or after January 1, 2009, will receive full or partial refunds. If you are unsatisfied with Citibank’s response, you can submit a complaint online or by calling the CFPB at 855-411-2372.
Nearly 2.2 million consumers who enrolled between 2000 and 2013 have already received or will receive refunds of about $196 million in fees for credit monitoring products (Privacy Guard, DirectAlert, IdentityMonitor, Citi Credit Monitoring Service).
The CFPB: “If you enrolled in these products, but did not receive all of the services promised, you will receive full refunds for the time you did not receive full services. Most eligible consumers have already received refunds.”
Citibank violated the law when enrolling some IdentityMonitor consumers and when some IdentityMonitor consumers called to try to cancel that product. The amount of refund is determined by a few factors, including whether consumers tried to cancel (even if they were persuaded to keep it), and how long they stayed in the product.
The U.S. agency also said that Citibank violated the law when selling certain debt protection products (AccountCare, Balance Protector, Credit Protection, Credit Protector, and Payment Safeguard) to some consumers. Some of the deceptive practices happened during telemarketing sales calls, while others happened when consumers applied for credit cards at certain retail stores, using “point of sale” terminals or at specialty services desks.