Citibank Ordered to Pay $700 M Over Credit Card Malpractices
The day this circle with or without Govt/Jago Grahak help can bring Indian banks with similar malpractices to justice, we would have made it...
Citibank Ordered to Pay $700 Million Over Credit Card Practices
Citigroup Inc's consumer bank has been ordered to pay $700 million in relief to borrowers for illegal credit card practices, the US Consumer Financial Protection Bureau said.
The consumer finance watchdog said on Tuesday that about 7 million customer accounts were affected by Citibank's "deceptive marketing" practices, which included misrepresenting costs and fees and charging customers for services they did not receive.
The CFPB, set up under the 2010 Dodd-Frank Act aimed at reforming Wall Street practices, said a Citibank unit also "deceptively" charged nearly 1.8 million consumer accounts often unnecessary same-day payment fees while collecting payments.
Citibank misrepresented the charge of $14.95 per account as a "processing" fee and did not explain that the fee was merely to make a faster payment, the CFPB said.
Citibank and its subsidiaries will also pay $35 million in civil penalties to the CFPB and $35 million to the Office of the Comptroller of the Currency.
"Citi is fully reserved for costs associated with the agreements," the bank said in a statement. Citi said it had cooperated with the regulators in the probe.
Citi is not the only big US bank whose credit card practices are under scrutiny.
US authorities, including the CFPB, said earlier this month that JPMorgan Chase & Co would pay $136 million and reform its credit card debt collection practices.
JPMorgan was accused of relying on robo-signing and other discredited methods of going after consumers for debts they may not have owed and for providing inaccurate information to debt buyers. more
Citibank Ordered to Pay $700 Million Over Credit Card Practices
Citigroup Inc's consumer bank has been ordered to pay $700 million in relief to borrowers for illegal credit card practices, the US Consumer Financial Protection Bureau said.
The consumer finance watchdog said on Tuesday that about 7 million customer accounts were affected by Citibank's "deceptive marketing" practices, which included misrepresenting costs and fees and charging customers for services they did not receive.
The CFPB, set up under the 2010 Dodd-Frank Act aimed at reforming Wall Street practices, said a Citibank unit also "deceptively" charged nearly 1.8 million consumer accounts often unnecessary same-day payment fees while collecting payments.
Citibank misrepresented the charge of $14.95 per account as a "processing" fee and did not explain that the fee was merely to make a faster payment, the CFPB said.
Citibank and its subsidiaries will also pay $35 million in civil penalties to the CFPB and $35 million to the Office of the Comptroller of the Currency.
"Citi is fully reserved for costs associated with the agreements," the bank said in a statement. Citi said it had cooperated with the regulators in the probe.
Citi is not the only big US bank whose credit card practices are under scrutiny.
US authorities, including the CFPB, said earlier this month that JPMorgan Chase & Co would pay $136 million and reform its credit card debt collection practices.
JPMorgan was accused of relying on robo-signing and other discredited methods of going after consumers for debts they may not have owed and for providing inaccurate information to debt buyers. more
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Oct 31
Further to my comment about service charges claimed by the Nonbankikng financial institutions, I am giving below an email received from Homecredit finance, Delhi where they are asking to pay Rs.300/- as service charges for delayed payment of Rs.800/- i.e. 37.5% as service charges. How RBI is allowing this and why RBI is not having any control over these finance companies. "From: Home Credit India ( Customer Care Team) Date: Sun, Jul 26, 2015 at 5:32 PM Subject: Re: Payment of Last Instalment-Loan A/c No.HCIN3401976930 To: balachandransiyer@gmail.com Dear Sir, Thank you for your query to Home Credit India. In reply to your query, we wish you inform that you made the payment of your last emi on 14th Jul'15 and your due date is 1st of every month. As you made the payment by 14 days late so late payment charges are levied on your account. We request you to please make the payment of Rs. 300 with service charges as soon as possible for avoide levied more late payment on your account. Please make the cash payment as soon as possible and the additional transaction amount as mentioned below:- Partner Name Transaction Fee India Post Rs. 28/- SBI BAnk Rs. 30/- Axis Bank Rs. 23/- Suvidha Rs. 28/- Easy Bill Rs. 20/- ITZ Rs. 20/- Online payment Free We sincerely hope that the above resolution is to your satisfaction. Alternatively, Please do not hesitate to contact our customer service team phone: 1800 121 6660, or email:-care@homecredit.co.in should you need any further clarification. Yours sincerely, Customer Care Team Home Credit India Finance Private Limited . more
Jul 26
It is terrifying to note the malpractices being resorted to by even International banks such as Citi for looting their so called ' valued customers ' not to imagine the atrocities being committed by Indian banks particularly private ones. In light of this verdict from CFPB of USA, 1) GOI / RBI should explore & probe the operations/dealings of Citi in India too if similar fraudulent means are adopted here. 2)when institutions like CIBIL monitor the credit rating of individuals, there should also be institution to probe on banks on exclusive basis for frauds instead of relying on the CA's reports and if found to be involved in malpractices, they should be barred from operation in the country 3)all types of dealings of the banks on all their products should be brought under the purview of audit by any external agency nominated by GOI / RBI. more
Jul 24
In India we have one INDIAN BANKS' ASSOCIATION which guides all the banks in India. You write them anything you will hardly get any reply forget about the service you have mentioned.Our Government has to tame them? more
Jul 23
GEDELA KRISHNAMURTY NAIDU (Specialist in Construction Management of Power Plants /tHERMAL/Gas/Solar)
I agree with Anthony and customers/credit card holders shall be more careful about their payments. Never try to withdraw cash from credit card account G.K.Naidu, Hyderabad more
Jul 23
