Miller, four other AGs announce $4.2 million settlement
DES MOINES ― Attorney General Tom Miller announced that Citibank will pay $4.2 million to resolve allegations that it overcharged credit card interest for about 25,000 customers in Iowa and four other states.
As a result of the settlement, Citi will refund $216,325 to 1,407 Iowa customers. The average Iowa refund is $153.75.
The settlement was achieved in partnership with the attorneys general of Massachusetts, New Jersey, North Carolina, and Pennsylvania.
“Thanks to my AG colleagues and staff for working together to investigate Citibank’s violations and make consumers whole,” Miller said.
The investigation arose from Citibank’s failure, from February 2011 to August 2017, to properly reevaluate and reduce the annual percentage rate, or APR, for certain consumer credit card accounts consistent with the requirements of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act). For six and a half years, Citibank failed to properly lower credit card interest rates for consumers who were entitled to reductions in their APR. Miller alleges that Citibank’s conduct in connection with the APR reevaluation issues violated the Iowa Consumer Fraud Act.
The attorneys general will be distributing refunds to eligible consumers through the settlement administrator Epiq Class Action & Claims Solutions, Inc. Eligible consumers do not need to take any action to receive their refunds, which will be sent as checks to eligible consumers in the middle of 2021. Only those Citi credit card customers who meet certain criteria set by the settling states will receive a refund check. Consumers who have questions can call toll free: 855-914-4657.
As explained in detail in a 2018 consent order between Citibank and the Consumer Financial Protection Bureau, 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 indicated by the look-back review, the CARD Act requires the bank to reduce the account’s APR. The CFPB’s Consent Order alleges that Citibank failed to properly implement the CARD Act’s look back requirements from 2011 to 2017.