Citibank to refund $4.3m to customers
Citibank will repay more than $3.3 million to about 39,500 current and former customers for failing to refund them when they closed a credit card account with an outstanding balance.
The refunds relate to Citibank, Virgin Money, Bank of Queensland, Suncorp and Card Services-branded credit cards and Citibank Ready Credit loan customers. Citibank is the credit provider for these products.
The n Securities and Investments Commission (ASIC) said in a statement the errors had occurred when some accounts were closed as far back as 1994.
Citibank will contact affected customers by November 30. They will receive a refund of the credit balance with interest via a bank cheque or direct credit into their account.
“Customers should be confident that when they close an account, they are refunded any outstanding balance,” ASIC deputy chairman Peter Kell said on Thursday.
ASIC said Citibank reported the issue to the regulator and co-operated to fix it.
Separately, Citibank will refund $1 million to another 4000 customers after misleading them about its responsibilities to investigate unauthorised transactions on their accounts.
ASIC said Citibank had refused customers’ requests to investigate unauthorised transactions because it claimed the requests were made outside a time period permitted by Visa and MasterCard.
“Citibank incorrectly stated that because the request was made outside the timeframe specified by Visa and MasterCard, it was not required to assess the claim, and that the customer’s only options were to approach the merchant or a fair trading agency,” ASIC said.
“The letter would likely have misled customers about their protections under the ePayments Code.”
The ePayments Code provides protections to consumers for unauthorised transactions.
A Citibank spokeswoman said the bank had strengthened its systems to ensure the errors did not occur again.