Tuesday 21 July 2015 11:09 am
Citigroup slapped with $70m fine and ordered to repay credit card customers $700m
At least it's not just European banks being slapped on the wrist by US regulators. Citigroup has been hit with a $70m (£45m) fine and ordered to pay $700m in remediation to customers after a review into how it sold credit card products. Read more: Citi to exit consumer banking in 11 territories
The bank said today it had been penalised by the US Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) over billing and marketing practices related to credit card add-on products, including credit monitoring and debt protection products, alongside wallet protection services. It was also criticised by charging expedited pay-by-phone fees.
However, it added that some of those practices had been administered by third parties.
In a statement today it said it had co-operated fully with the CFPB and OCC, and had taken "extensive steps" to address the issues, discontinuing sales of the products named.
"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.
"Citi continually reviews our policies, processes, systems and controls so that all of our products and practices meet or exceed the high standards that both we expect and our customers deserve."
It's not the first time Citi has had trouble with regulators: in May it said it could plead guilty to antitrust charges from the US Department of Justice relating to forex manipulation, adding that business restrictions and sanctions could be the result.