One of the largest banks in the US will pay a $9 million fine for allegedly forcing its customers to suffer through illegal credit card and billing practices.
The Consumer Financial Protection Bureau (CFPB) says Citizens Bank, which operates in 14 states and has $222 billion in assets, failed to properly respond to customers’ credit card disputes and fraud claims.
“The bank failed to reasonably investigate and resolve billing error notices and claims of unauthorized use by making customers jump through unnecessary and burdensome hoops, which are not required under the Truth in Lending Act, to report fraud.
The bank also failed to fully credit customers’ accounts when unauthorized use and billing errors occurred by sometimes not refunding all finance charges or fees owed to customers.”
The CFPB says the bank, which is based in Rhode Island, also failed to provide customers who submitted billing error notices with required acknowledgement and denial notices.
It also failed to disclose mandatory credit counseling information to people who called the bank’s toll-free number specifically set up for that purpose.
CFPB director Rohit Chopra says other banks should be on notice.
“Federal law provides important rights to credit cardholders when disputing transactions and resolving billing errors. As outstanding credit card debt approaches $1 trillion, the CFPB will be closely watching the conduct of the credit card industry.”
Citizens Bank, which is a subsidiary of Citizens Financial Group and is one of the 15 largest consumer banks in the country, did not admit or deny the allegations in the settlement.
The $9 million fine will go to the CFPB Civil Penalty Fund, which is designed to compensate eligible harmed consumers and to provide funding for consumer education and financial literacy programs.
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