Citigroup Inc. has been ordered to pay US$700 million to about 7 million customers for illegal practices related to credit card add-on products and services.
Under a ruling from the US Consumer Financial Protection Bureau (CPFB), Citi will also pay civil penalties of US$35 million each to the consumer finance watchdog and the Office of the Comptroller of the Currency, Reuters reported.
CFPB said on Tuesday that Citibank had indulged in “deceptive marketing” practices, which included misrepresenting costs and fees and charging customers for services they did not receive.
A subsidiary also deceptively charged often unnecessary same-day payment fees while collecting payments, said the agency, which was set up under the 2010 Dodd-Frank Act aimed at reforming Wall Street.
Citi said it had been issuing refunds and had stopped selling products that were part of its agreements with the regulators, including credit monitoring and debt protection products.
The bank “will continue to notify and refund affected customers,” it said in a statement.
“Affected customers will automatically receive a statement credit or check, and those no longer with Citi who are eligible will be mailed a check.”
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