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Citibank Debt Collection Practices Investigation

It’s sad when a bank with as long and proud a history as Citibank slides into debt collection violations.

Citibank began in 1812 as the City Bank of New York. It helped finance the War of 1812, the Civil War, and the Panama Canal. In the 1970s, it was one of the first banks to introduce automatic teller machines, and it registered Citibank.com in 1991, before the World Wide Web existed, and soon after began allowing traveling customers to access their home accounts from Citibank branch locations overseas.

But in 2015, it was accused of deceptive credit card marketing practices, such as misrepresenting fees and wrongfully charging customers, and was forced to pay $770 million to borrowers.

And in 2016, the Consumer Financial Protection Bureau (CFPB) completed two separate actions against it for illegal debt-related practices. The first accused Citibank of selling credit card debt with inflated interest rates to debt buyers, even claiming on some that interest rates were 29% when in fact they were 0%, and for failing to forward approximately 14,000 payments promptly to debt buyers. For these actions, it was required to pay almost $5 million to consumers and $3 million as a penalty. It was also required to amend certain practices, such as stopping selling debt that it could not verify, such as in cases when consumers had reported identify theft.

The second action involved two debt collection law firms hired by Citibank falsifying court documents for debt collection cases in New Jersey, such as changing dates and debt amounts on affidavits, in violation of the Fair Debt Collection Practices Act (FDCPA). CFPB ordered Citibank and the firms to refund $11 million to customers and stop collection on about $34 million in debt to about 7,000 customers.

Online complaints indicate there may be other instances where individuals are treated unfairly—complaints, for example, alleging that Citi did not follow up on fraud allegations or where the bank appeared to be attempting to circumvent bankruptcy laws.

We’re investigating Citibank’s debt collection practices right now, gathering evidence to see if a class action is needed.

Here are some kinds of behavior that state and federal laws forbid:

  • Harassing you, for example by making your phone ring repeatedly.
  • Sending debt collection letters that are confusing.
  • Sending debt collection letters that contain misstatements or misrepresentations, such as misstating the amount of the debt, falsely claiming that the sender is lawyer, or threatening to take action that the sender can’t legally take.
  • Trying to collect debts which you have already paid or which have been discharged in bankruptcy.
  • Trying to collect old debts for which the statute of limitations has expired.
  • Adding extra fees and charges to the amount you owe.
  • Talking about your debt to third parties, such as family, friends, or employers.
  • Robo-calling you on your cell phone about your debt.
  • Calling you too late at night or too early in the morning, or calling you too many times.
  • Refusing to stop calling when you ask them to.
  • Threatening you.

Laws vary in different states, but the Telephone Consumer Protection Act (TCPA)—which forbids robo-calls about debt to cell phones—is a federal law that applies in all fifty states.

If you’ve experienced questionable debt collection practices with Citibank, fill out the form on this page and attach evidence, such as letters received or cell phone numbers called and dates of calls.

Article Type: Investigation
Topic: Consumer
No case events.
Tags: Unlawful Debt Collection