After launching an investigation against Citibank Card Serves, the Consumer Financial Protection Bureau (“CFPB”), recently ordered the credit card company to repay its card holders $700 million and fined the bank $70 million as a punishment for conducting misleading and deceptive business practices.
According the to the CFPB, the agency in charge of consumer protection in the financial marketplace, Citibank is the third bank of its kind to be punished for its deceptive conduct, first was JP Morgan Chase in 2013, then Bank of America last year and now Citibank. The CFPB states that in its investigation, it discovered that Citibank has been misleading consumers since 2000, even thought the agency itself has only been in existence for the last 5 years.
In it is investigation, the CFPB exposed tactics where the credit card company signed up naive consumers into credit card agreements that were riddled with add-ons. According to the CFPB this conduct ranged from 2000 to 2013 costing consumers millions of dollars over the 13 year time period. For example, the CFPB uncovered a scam where employees sold consumers a one month free trial of identity theft protection services, when no free trial existed; sold credit monitoring services when the bank was not equipped to monitor a consumer’s credit; charged consumers a fee for making a payment by phone and failed to tell consumers that a no fee option was available; enrolled consumers for add-on services when they had requested not to receive any.
The CFPB went on to state that the sale of these add on services were extremely lucrative for the credit card company and earned the company just under $700 million in extra revenue over the years. The CFPB warns consumers shopping around for a credit card that the reality is purchasing add ons to a credit card will rarely aid a consumer and consumers are advised to stay away from these credit card extras.
Under the agreement made at the end of July, Citibank will repay just under 9 million consumers to whom it sold these add on products and pay two separate fines totaling $70 million to the CFPB and the Office of the Comptroller of the Currency.
If you believe your rights have been violated, and you would like to speak with a licensed attorney, contact SmithMarco, P.C. for a completely free case review.