The Consumer Financial Protection Bureau fined Providence, R.I.-based Citizens Financial Group $9 million for violating consumer financial protection standards on disputed credit card transactions.
According to the CFPB, Citizens violated the Truth in Lending Act by improperly denying customers’ requests for reports of fraud and errors and requiring them to “jump through unnecessary and burdensome hoops, which are not required under the Truth in Lending Act, to report fraud.” Citizens Bank allegedly failed to fully credit accounts when unauthorized use and billing errors did occur.
“The bank did not provide certain individuals who submitted billing error notices with required acknowledgement and denial notices, which inform them that their disputes have been received, and, if applicable to a person’s case, that the dispute was denied,” the report stated. “The bank also did not disclose required credit counseling information to individuals who called the bank’s toll-free number designated for that purpose, and instead routed some individuals to the bank’s collections department.”
The CFPB originally sued Citizens Bank in January 2020. The $222 billion financial institution is one of the 15 largest banks in the country. “Federal law provides important rights to credit cardholders when disputing transactions and resolving billing errors,” said Director Rohit Chopra. “As outstanding credit card debt approaches $1 trillion, the CFPB will be closely watching the conduct of the credit card industry.”
Following the CFPB’s order, Citizens Bank said it had “self-identified operational errors” and subsequently started remediation voluntarily after the problem was first discovered eight years ago.
“While Citizens continues to disagree with the CFPB’s stance with respect to these long-resolved issues, which were self-identified and voluntarily addressed years ago, we are pleased to put this matter behind us,” said General Counsel Polly Klane. “We remain proud of our commitment to transparency, our rigorous compliance programs, and our consistent effort to treat customers fairly and operate responsibly.”