1.75 million Citibank cardholders will soon get a refund check due to a miscalculation of annual percentage rates (APRs). The bank disclosed to the Bureau of Consumer Financial Protection that errors in its APR reevaluation methodologies had been identified, causing some cardholders eligible for APR rate reductions to be incorrectly charged a higher APR. Impacted accounts include both regular credit cards and co-branded credit cards.
As part of the investigation, the bureau did not assess monetary penalties against Citibank based on multiple factors including that the bank self-identified and self-reported the error. The bureau noted that Citi has “voluntarily initiated the process of providing restitution to affected consumers and implementing enhancements to its compliance management systems, worked proactively with the bureau, and kept the bureau apprised of additional findings as its review progressed.” After a review Citibank is expected to refund $335M, or an average of $190 per affected account, depending on the actual excess interest charged to each account.
Citibank announced on their website that no action is required by customers. Citibank will contact customers who are due a refund, with refunds expected by end of year. Current Citibank customers may receive a statement credit, while former cardholders may receive a check.