Citigroup to Refund $700M for ‘Add-Ons’

Last month, the Consumer Financial Protection Bureau (CFPB) published thousands of consumer narratives describing their various complaints with financial products, including reverse mortgages.

Other major U.S. banks under that have been fined over credit card misconduct include JPMorgan Chase & Co and Bank of America Corp.

The action comes from the consumer watchdog agency established exactly five years ago under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Cruz stated. “The legislation that Rep. Ratcliffe and I are introducing today gives Congress the opportunity to free consumers and small businesses from the CFPB’s regulatory blockades and financial activism, which stunt economic growth”.

“We continue to uncover illegal credit card add-on practices that are costing unknowing consumers millions of dollars”, CFPB Director Richard Cordray said in a statement. “This is the tenth action weve taken against companies in this space for deceiving consumers.”.

Some of the illegal activity by Citi goes back to as early as 2000, the CPFB said, and ended in 2013.

Additionally, Citibank and its subsidiaries will pay $70 million in civil penalties to the regulators.

In another situation, Citi sold credit-monitoring services when Citi wasn’t performing such services at all, or were not actively monitoring a consumer’s credit file with credit-reporting bureaus.

Regulators found that the bank offered customers a number of debt protection add-on products that pledged to write off, balance or defer the due date of payments for customers in instances of unforeseen hardships, such as job loss, disability, hospitalisation or divorce, as well as anti-fraud card monitoring services.

“Add-on services, for the most part, provide no benefit to consumers and people should be very careful to sign up for them, ” said Nick Bourke, an expert at the Pew Charitable Trusts specializing in consumer lending issues.

Seems like credit-card companies are a bit like proverbial old dogs.

In a statement, Citi said it stopped illegal practices in 2013 and is in the process of issuing refunds or credit card statement credits to the affected customers. Those who no longer have an account with the bank will receive their refund by mail.

As of May 21, Citi had paid out over 17 billion in fines and settlements since the financial crisis.