TRENTON -- Attorney General Gurbir S. Grewal announced today
that Citibank will pay a total of $4.2 million to eligible consumers in New
Jersey and four other States to resolve allegations the company overcharged
credit card interest for tens of thousands of consumers.
As a
result of the settlement, Citibank will refund a total of approximately $1.13
million to more than 7,000 eligible New Jersey consumers. Eligible consumers in
New Jersey will receive between $55.93 and $2,256.76 each, with an average
refund per consumer of about $159.
North
Carolina, Pennsylvania, Iowa, and Massachusetts are also participating in the
Citibank settlement include. Overall, approximately 25,000 current and former
Citibank customers will receive refund checks as a result of the agreement.
The
multi-state investigation that led to today’s settlement was triggered by
Citibank’s failure to properly reevaluate and reduce the annual percentage rate
(APR) for certain consumer credit card accounts as required by the federal
Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD
Act), as well as by States consumer protection laws.
The
CARD Act requires credit card issuing banks to perform a “look back” at least
every six months to review whether, for accounts where the bank has increased
the APR due to credit risk or other factors, the factors that prompted the
increase have changed. When the look back review yields information that calls
for it, the law requires banks to reduce the account’s APR. The States’ joint
investigation found that for a period of nearly seven years beginning in early
2011, Citibank failed to properly lower credit card interest rates for
consumers who were entitled to reductions in their APR.
“We’re
committed to ensuring that New Jersey consumers are treated fairly by credit
card companies and financial institutions,” said Attorney General Grewal.
“Today, we’re happy to be putting more than a million dollars back in the
pockets of New Jersey residents.”
“Through
this settlement we are holding Citibank accountable for its failure to treat
credit cardholders fairly, and at the same time providing important relief to
those consumers,” said Acting Division of Consumer Affairs Director Kaitlin
Caruso. “I’m certain affected Citibank cardholders in New Jersey and across the
country could have used the extra dollars they were charged in interest for
other purposes, and we’re pleased to have obtained refunds for the thousands of
New Jersey consumers who were harmed.”
New
Jersey and the other participating States will be distributing settlement
refunds to eligible consumers through Epiq Systems Inc., a settlement
administrator. Consumers need not take any action to receive their funds, which
will be sent as checks to eligible consumers in the middle of 2021.
Only
those Citibank credit card customers who meet certain eligibility criteria will
receive a refund check. Consumers who have questions regarding the refund
distribution can contact Epiq at (855) 914-4657.
Citibank
previously entered into a separate settlement with the federal Consumer
Financial Protection Bureau (CFPB) that resolved that agency’s own
investigation into allegations Citibank failed to reevaluate and reduce APRs
for 1.75 million consumer credit accounts. The CFPB settlement required
Citibank to pay a total of $335 million in restitution to affected consumers.
Today’s settlement provides additional relief for consumers in New Jersey and
four other States.
Deputy Attorney General and Section Chief Patricia
Schiripo, of the Consumer Fraud Prosecution Section within the Division of
Law’s Affirmative Civil Enforcement Practice Group, handled the Citibank matter
on behalf of the State.
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