Citigroup Refunding $330 Million in Interest Overcharges Citigroup Refunding $330 Million in Interest Overcharges

Citigroup Refunding $330 Million in Interest Overcharges

Citigroup credit card holders may be in for a refund after the company discovered it had overcharged a number of customers. It’s estimated that 1.75 million Citi customers — equal to approximately 10% of their total cardholders— were assessed at a higher annual interest rate, with total refunds topping $330 million. As a result the company reports that the average refund being issued is $190, which includes interest. Regarding the overcharges, Citi’s head of global consumer banking public affairs Liz Fogarty said, “We sincerely apologize to our customers and are taking every action to provide refunds as quickly as possible.”

According to CNN Money, the error came as a result of Citi not properly updating user’s accounts when they were eligible for a rate reduction. Under the CARD (Credit Card Accountability, Responsibility, and Disclosure) Act of 2009, credit card issuers are supposed to perform semi-annual reviews to see if customers qualify for the different rate. For example, while making two consecutive late payments can raise your interest rates, making on-time payments for the next six month should make cardholders eligible for a rate decrease. Fogarty explained the error saying, “While we believed our methodology was sound, a periodic internal review identified potential flaws in the methodology used to reevaluate interest rates on some credit card accounts.”

Interestingly customers affected by the issue fall into two camps. Half of the cardholders in question received no rate reduction even though they were eligible. Meanwhile the other half did receive a reduction but it was not as significant as it should have been.

Despite the protections CARD puts in place, this Citi error should serve as a reminder to consumers to know their rights and keep a closer eye on their finances. Thankfully those affected will now be receiving refunds but one can’t help but wonder how easy it could have been for the problem to go unnoticed. On that note, to their credit, Citigroup does appear to be making things right — something that may help them win back consumer trust in an industry that so many are skeptical of.

The "Email" field is empty, you must enter some text to proceed.The text you entered in the "Email" field appears to be invalid, please edit it and try again
Get the Latest News Delivered to Your Inbox

FedEx Announces Winners of 11th Annual 2023 Small Business Grant Contest

Nearly three months after the entry period ended, FedEx has announced the winners of its 11th annual Small Business Grant Content. This year's event saw more than $300,000 in funds going to a variety of small businesses across the nation. Last month, the company revealed 100 finalists, with that list now being narrowed down to just 10 winners. This year's grand prize winners included KindVR, The Cupcake Collection, Up In...
Summer app

Student Loan Benefit FinTech Summer Raises $6 Million

For years, student debt has been one of the most talked about financial topics. What's more, while the debt itself has become a major part of many Americans' lives, discussion of student loans has become political due to efforts to forgive certain loan repayments. However, while we wait for resolution on that front, a FinTech that brings student debt benefit solutions to employers and consumers has raised a new round...
Melissa Urban holding a Ness card

Health and Wellness Rewards Card Ness Partners with Whole30

In recent years, several unique rewards cards have come to market. These include offerings from FinTech startups as well as brands looking to do something special for their loyal fans. On that note, a recently-announced rewards credit card offering is now working with a popular brand to introduce new benefits for customers. This week, the Ness Card (which is issued by The Bank of Missouri) unveiled a new partnership with...
Choice Privileges Select Card

Choice Hotels, Wells Fargo Debut Choice Privileges Select Card

With spring well underway and the summer travel season now just around the corner, Choice Hotels and Wells Fargo have unveiled their latest co-branded credit card offering. Today, the two companies announced the Choice Privileges Select Mastercard. Carrying an annual fee of $95, this card will serve as the premium option in the hotel brand's new lineup. Looking at the Choice Privileges Select, it offers a mix of rewards categories....
H-E-B and Central Market  credit cards

Imprint Launches Credit Cards from H-E-B and Central Market 

The FinTech Imprint is partnering with the popular Texas-based grocery chain H-E-B for a pair of new rewards credit cards. This week saw the launch of the H-E-B Visa Signature Credit Card as well as the Central Market Visa Signature Credit Card. With these two (nearly identical) options, customers will be able to earn rewards on groceries and beyond. First, both versions of the card earn up to 5% back on select...