Citizens Bank, one of the largest banks in the US, has been ordered to pay a $9 million penalty following allegations of subjecting its customers to unlawful credit card and billing practices.
The Consumer Financial Protection Bureau (CFPB) recently revealed that the bank, operating across 14 states and boasting $222 billion in assets, inadequately addressed credit card disputes and fraud claims from its customers.
The CFPB accused Citizens Bank of mishandling billing error notices and claims of unauthorized credit card usage, forcing customers through unnecessary and burdensome procedures, which are not required under the Truth in Lending Act, in order to report fraud. Furthermore, the bank failed to fully reimburse customers’ accounts for unauthorized use and billing errors, occasionally neglecting to refund all finance charges or fees owed to them.
Another violation involved Citizens Bank’s failure to provide customers who submitted billing error notices with the mandatory acknowledgment and denial notices. Additionally, the bank neglected to disclose essential credit counseling information to callers who reached their toll-free number established for that purpose.
Highlighting the seriousness of the issue, CFPB Director Rohit Chopra emphasized that federal law grants critical rights to credit cardholders when disputing transactions and resolving billing errors. With outstanding credit card debt nearing the $1 trillion mark, the CFPB vows to closely monitor the conduct of the credit card industry.
While the settlement has been reached between Citizens Bank and the CFPB, the bank did not admit nor deny the allegations put forth.
The $9 million fine will be directed to the CFPB Civil Penalty Fund, which aims to compensate eligible harmed consumers and support initiatives promoting consumer education and financial literacy. This development serves as a reminder to other banks to ensure compliance with regulations, safeguard customer rights, and maintain transparent practices in the credit card industry.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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