PROVIDENCE – Without admitting fault, Citizens Bank on Tuesday agreed to pay $9 million to settle allegations of failing to properly manage and respond to customers’ credit card disputes and fraud claims.
The Consumer Financial Protection Bureau filed suit in January 2020 alleging Citizens violated the Truth in Lending Act and Regulation Z. The CFPB claimed the bank improperly denied customer reports of fraud and errors and failed to provide refunds. The CFPB also said Citizens failed to reasonably investigate and resolve billing error notices and claims of unauthorized use by making customers “jump through unnecessary and burdensome hoops.”
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Citizens also allegedly failed to fully credit customers’ accounts when unauthorized use and billing errors occurred by sometimes not refunding all finance charges or fees. In addition, it did not provide customers with required acknowledgment and denial notices, according to the CFPB.
“Federal law provides important rights to credit cardholders when disputing transactions and resolving billing errors,” said CFPB Director Rohit Chopra. “As outstanding credit card debt approaches $1 trillion, the CFPB will be closely watching the conduct of the credit card industry.”
In a statement, Citizens Financial Group, the parent company of Citizens Bank, acknowledged “certain billing errors and related issues that impacted a very small subset of Citizens’ credit card customers nearly eight years ago.”
Citizens said it had self-identified operational errors in 2015 that may have impacted approximately 2%, or about 25,000, of Citizens’ approximately 1.2 million credit card customers. The bank said it had contacted the CFPB to report the issues. Citizens said its voluntary remediation efforts were all completed shortly after the issues were discovered and the bank had “exceeded all obligations to make customers whole.”
Citizens Financial Group Inc., based in Providence, reported $222 billion in assets as of March 31, 2023, and is one of the 15 largest consumer banks in the country.
Sam Wood is a PBN staff writer. Contact him at Wood@PBN.com
