The Consumer Financial Protection Bureau last week ordered Citibank and its subsidiaries to pay about US$700 million in relief to eligible consumers and a $35 million civil penalty for, in essence, scamming consumers into paying for unwanted credit card add-on products and services.This is the 10th action the bureau has undertaken against banks for deceiving consumers in its four years of existence.The CFPB’s consent order names Citibank, Department Stores National Bank, and Citicorp Credit Services as the defendants.The bank or its service providers misrepresented costs and fees, misrepresented the benefits of some services, used illegal practices to enroll consumers for those services, misrepresented or omitted information about eligibility for coverage, and engaged in unfair billing and deceptive collection practices, the CFPB found.”Citibank is the latest big credit card company to pay the price for deceptive sales of extremely profitable, nearly useless credit card add-on products,” said Edmund Mierzwinski, consumer program director at U.S. PIRG (Public Interest Research Group).”CFPB has now directly returned over $2 billion to consumers from sketchy add-on practices by all the biggest banks,” Mierzwinski told CRM Buyer. About 7 million consumer accounts were affected by Citibank’s deceptive marketing, billing and administration of debt protection and credit monitoring… Read full this story
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