WASHINGTON Citigroup is facing $770 million in charges after two federal regulators said the megabank engaged in deceptive marketing and unfair billing practices related to its credit card add-on products.
The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency filed separate orders today against Citibank related to add-on products like debt protection and credit monitoring, which were partly administered by vendors. Regulators also alleged that a Citi subsidiary charged deceptive fees for collecting payments on certain delinquent credit card accounts.
The CFPB ordered Citibank and the subsidiary to pay $700 million in restitution to nearly 9 million affected consumers as well as a $35 million civil money penalty. The OCC separately required Citibank and the affiliate to pay a $35 million money penalty. Citibank has agreed to the stipulations in both orders without admitting or denying wrongdoing.
"We continue to uncover illegal credit card add-on practices that are costing unknowing consumers millions of dollars," said CFPB Director Richard Cordray in a press release. "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."
In a company issued statement, Citi said it has already begun remediation to consumers and no longer offers the products cited by regulators.
"Citi 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," the company said. "Customer remediation has been underway since 2013, and Citi will continue to notify and refund affected customers. Affected customers will automatically receive a statement credit or check and those no longer with Citi who are eligible will be mailed a check."