Above Photo: From Publicbankinginstitute.org
Oops. $330 MILLION is a rather large mistake. Citi hiked credit card holders’ interest rates immediately after two late payments, then never corrected them as required after the customers paid on time for the next six months. Half of the credit card customers got no reduction to interest rates at all. Half got only a small reduction.
Citigroup said it would refund about $330 million to consumers after discovering it had overcharged 1.75 million credit card accounts on their annual interest rates.
The mistake was discovered after a “periodic internal review,” not via an external regulator, and the mistakes had been going on since 2011. That’s seven years of overcharging 1.75 million customers on their interest rates, which seems a very long time to take to discover a mistake of this magnitude, especially when you consider customers are punished immediately after just two months of being late on a payment date.
Which begs the question, how many other megabanks are making these kinds of “mistakes”? And why are we allowing banks with this kind of track record for punishing customers to hold public funds?