Citibank settles with state, to repay millions

[KansDem]

Anyone else catch this story?

Citibank settles with state, to repay millions
Bob Egelko, Chronicle Staff Writer

Wednesday, August 27, 2008

Citibank will refund millions of dollars to credit card customers and pay $3.5 million to the state of California to settle a lawsuit that accused the company of stealing funds from some of its customers who had died, gone bankrupt or fallen behind in their payments.

The settlement, announced Tuesday, requires repayment of more than $14 million that the bank wrongly took from the accounts of 53,000 customers nationwide in so-called credit sweeps from 1992 to 2003, Attorney General Jerry Brown said. California customers, who lost $1.6 million during that period, are entitled to 10 percent interest on their refunds, Brown said.

According to Brown's office, Citibank used a computer program that automatically swept up their customers' positive account balances - money they had overpaid, by inadvertently double-paying a credit card bill or by buying something on credit and later returning it after making payments.

Typically, said Dana Simas, a spokeswoman for Brown, an overpayment would occur when the estate of a recently deceased customer paid a bill that had already been paid, or when a customer who was behind on payments and pressed by collectors lost track of how much he or she had paid.

Citibank appropriated the money without notifying the customer and regardless of whether the customer had an overdue bill, Brown's office said.

--more--
SFGate

Stealing from the most vulnerable members of society! :grr:

And what about this quote?
"Stealing from our customers is a business decision, not a legal decision," the supervisor was quoted as saying.

"The company knowingly stole from its customers, mostly poor people and the recently deceased, when it designed and implemented the sweeps," Brown said in a statement.

So who's going to jail for this? I thought if you stole something from somebody, you go to jail!

[antigop]

1. I heard about this on NPR. Thanks for posting. n/t

[GreenPartyVoter]

2. And no fall-guys of Club Fed

[DCKit]

3. Grave robbers too? Damn, I knew they were lower than low, but DAYUM!! n/t

[hootinholler]

4. This needs way more recs! n/t

[truedelphi]

5. Unfortunately, it will probably be Citibank RuUNNING a JAIL than

having its "money experts" spend time as prisoners in one.