Citi to refund $3.3 million to credit card customers
The bank is reimbursing 39,500 customers after failing to issue refunds from closed credit card accounts.
A whole lot of current and former Citi customers are about to receive refunds in their accounts. After failing to refund customers who closed their accounts without withdrawing their balance, Citi will refund $3.3 million to approximately 39,500 customers. It will provide refunds for Citi-issued cards as well as Virgin Money, Bank of Queensland, Suncorp and Card Services branded credit cards. The refund will also apply to eligible Citibank Ready Credit loan customers.
Citi is writing to eligible customers to inform them that they will receive a refund of the credit balance with interest. If you’re no longer a customer, you’ll receive a bank cheque, whereas current customers will receive a direct credit into their account.
"Customers should be confident that when they close an account, they are refunded any outstanding balance," ASIC deputy chair Peter Kell said.
If you haven’t received a letter or email, you can claim your balance via ASIC’s MoneySmart website. Any closed credit or loan accounts with more than $500 in balances that haven’t been transacted on for seven years (or three years as applicable) have been transferred to ASIC as stipulated under unclaimed money legislation.
Citi reported this issue to ASIC and has cooperated with the independent government body to resolve the matter. To prevent this from happening again, Citi has strengthened its systems so that cheques for credit balances are automatically issued to customers when they close their accounts.
The bank is also refunding $1 million to 4,000 current and former customers after miscommunication around its obligations concerning unauthorised transactions. Citi had refused requests to investigate unauthorised transactions because the requests were made outside of the time period permitted under Visa and Mastercard scheme chargeback protection policies. However, the customers who had received these responses were actually reporting “card not present” transactions.
So Citi’s responses likely confused customers and misled their protections under the ePayments Code, which provides protection to consumers in the event of unauthorised transactions which is separate from the protections provided by Visa and Mastercard.
“If an unauthorised payment has been made on their account, customers should be confident that their bank will appropriately investigate the payment. Customers should never be misled about their rights under the Code,” said Kell.
Affected customers can also expect to receive communication from Citi regarding these refunds.