Citibank will be required to pay $700 million to 8.8 million customers for illegal credit card practices, the Consumer Financial Protection Bureau said Tuesday.
Between 2002 and 2013, Citibank sold its credit card customers add-on services that deceptively promised to add payment flexibility by deferring or canceling payments during hard times, and to protect against fraud and identity theft.
According to the CFPB order, Citi misrepresented the costs of these products, which came under names like "AccountCare" and "PrivacyGuard," as well as what they actually did. Some consumers weren't aware they were signing up for the products when they applied for a Citi credit card, or signed up as a result of leading questions.
In other cases, the bureau said, Citi simply failed to provide the fraud and personal information protection it said it was offering, because it signed ineligible customers up for the products without informing them that they weren't eligible for it. Citi also charged some customers $14.95 to make a same-day credit card payment without informing them of other payment options.
The bank said in a statement that it "previously discontinued sales of the products included in the agreements, which include credit monitoring and debt protection products and wallet protection services, and no longer charges expedited pay-by-phone fees."
Customer eligible for refunds will automatically receive account credit or checks, Citi said.