Citibank Will Pay $4.2M To Customers To Resolve Settlement

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  TRENTON – Eligible Citibank customers in New Jersey and four other states will be compensated to resolve allegations that the company overcharged credit card interest.

  There are approximately 7,000 customers in New Jersey who are eligible, according to Attorney General Gurbir S. Grewal. They will receive between $55.93 and $2,256.76 each, with an average refund per consumer of about $159.

  Other states involved are North Carolina, Pennsylvania, Iowa, and Massachusetts. In all, there are more than 25,000 consumers.

  An investigation had revealed that Citibank did not properly reevaluate and reduce the annual percentage rate (APR) for certain accounts as required by state and federal laws.

  The federal Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) requires that the bank must perform a “look back” at least every six months. If the customer has credit risk or other factors, they might be at a higher rate. So, the bank is required to check back to find out if the customer is still a credit risk or if their finances have got better. If their situations had improved, their APR would go down. Citibank had not checked back with customers and did not lower the APR.

  “We’re committed to ensuring that New Jersey consumers are treated fairly by credit card companies and financial institutions,” said Attorney General Grewal. “Today, we’re happy to be putting more than a million dollars back in the pockets of New Jersey residents.”

  “Through this settlement we are holding Citibank accountable for its failure to treat credit cardholders fairly, and at the same time providing important relief to those consumers,” said Acting Division of Consumer Affairs Director Kaitlin Caruso. “I’m certain affected Citibank cardholders in New Jersey and across the country could have used the extra dollars they were charged in interest for other purposes, and we’re pleased to have obtained refunds for the thousands of New Jersey consumers who were harmed.”  

  If a customer is impacted, they will receive a check. They don’t need to take any action to receive their funds. The refunds will be managed through a settlement administrator called Epiq Systems Inc. Questions can be handled by Epiq at (855) 914-4657.

  The issues spanned a duration of 2011 to 2018. In 2018, Citi resolved these previously reported issues with the Bureau of Consumer Financial Protection.

  “As Citi previously disclosed in early 2018, we self-identified, self-reported and corrected issues with APR rate re-evaluations as required by Regulation Z of the CARD Act. When we reviewed our implementation of the regulation, we identified a small portion of credit card accounts that received impermissible rate increases. We resolved the matter with the Consumer Financial Protection Bureau, refunded customers, and completed a comprehensive internal review to ensure our practices meet regulatory requirements,” CitiBank said in a statement.

  “Today, Citi has voluntarily signed an agreement with five states totaling $4.2 million in which the states will provide certain consumers with payments related to this legacy issue. The states will administer and distribute payments at their discretion. While Citi denies violating the states’ consumer protection laws, we are pleased to put this matter behind us.”