Citibank has been forced to refund $1,063,041 to approximately 7,000 Citi credit card accounts in Pennsylvania due to allegations of illegal overcharging of credit card interest.
The settlement, led by Pennsylvania Attorney General Josh Shapiro, was achieved in partnership with the attorneys general of Iowa, Massachusetts, New Jersey, and North Carolina. Citi will pay the five states a total of $4.2 million, with approximately 25,000 current and former Citi customers set to receive refund checks.
According to Attorney General Shapiro, “Citi failed to meet its legal obligation to consumers, and charged thousands of Pennsylvanians for bogus interest payments.” Shapiro added, “Today, our office got back more than $1 million for those Pennsylvanians who were overcharged. When banks step out of line, we will hold them accountable.”
The investigation into Citibank’s practices began due to the company’s failure to properly reevaluate and reduce the annual percentage rate (APR) for certain consumer credit card accounts, as required by the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act). From February 2011 to August 2017, Citibank failed to follow the law and lower credit card interest rates for certain consumers who were entitled to reductions in their APR.
The PA Office of Attorney General claims that Citibank’s conduct in connection with the APR reevaluation issues violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law. The attorneys general will be distributing the settlement to eligible consumers through Epiq Class Action & Claims Solutions, Inc., a settlement administrator.
Consumers do not need to take any action to receive their funds, 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 855-914-4657 for more information.
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 Consumer Financial Protection Bureau’s (CFPB) Consent Order alleges that Citibank failed to properly implement the CARD Act’s look back requirements from 2011 to 2017.
In a statement, the PA Office of Attorney General announced that it had filed an Assurance Voluntary of Compliance with the Court. This multistate investigation was led by Bureau of Consumer Protection Assistant Director Nicholas F. B. Smyth. For more information, consumers can contact the Press Office at 717-787-5211 or email press@attorneygeneral.gov.
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Key Facts
- State: Pennsylvania
- Agency: Pennsylvania AG
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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