Citigroup to refund 31000 people who were wrongly billed, says AG Eric

The $4.5 million in reimbursements announced Wednesday followed an October settlement between Schneiderman and Citigroup Global Markets Inc., the Citi subsidiary. The investigation initially found more than 31,000 customers were charged advisory fees; a wider review identified an additional 15,430 Citi customer accounts that were overcharged fees during frozen periods.

The agreement which was the result of an investigation by New York Attorney General Eric Schneiderman, the bank will return a total of $20m to its customers for overcharging them. However, in certain cases, if a customer’s account has been ‘frozen, ‘ they do not have to pay the fees. Customers were overcharged when CGMI failed to rebate certain clients’ accounts after periods of inactivity when fees should not have been charged but were.

Overall, more than 15,000 customers in the state will receive refunds totaling more than $4.5 million.The issue was discovered during a joint audit by Citibank and the Attorney General’s Office, Schneiderman said.

A second interim agreement covers the more recently uncovered overcharges for management fees the unit collected on inactive accounts.

Citigroup said in a statement, “We are pleased to work with the New York Attorney General on this matter”.

It is not known how much of the $657,000 will be returned to the 48 Citi customers who live in Western New York.

The refunds, which include more than 1,000 headed to customers in the five boroughs, are the latest outcome of a probe that began in 2012 following a complaint from a Westchester resident.

The investigation into CGMI is being led by Katherine Milgram, Deputy Chief of the Investor Protection Bureau as well as Assistant Attorney General Dhawal Sharma.