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Fraud complaints result in Citizens Bank being fined $9 million.

Citizens Bank fined $9 million over fraud complaints

Citizens Bank fined $9 million over fraud complaints

Citizens Bank Fined $9 Million for Violating Consumer Financial Law by US Consumer Financial Protection Bureau

The US Consumer Financial Protection Bureau (CFPB) has issued a $9 million fine against Citizens Bank for violating federal consumer financial law. The bank failed to properly process credit card disputes and neglected to refund charges and fees. The CFPB said that Rhode Island-based Citizens Bank also automatically denied fraud claims and billing error notices in certain circumstances, violating the Truth in Lending Act. The malpractice began in at least 2010 and persisted into early 2016, according to the suit. Citizens Bank said the issue impacted a small subset of its credit card customers.

CFPB Director Rohit Chopra said that federal law provides important rights to credit cardholders when disputing transactions and resolving billing errors. As outstanding credit card debt approaches $1tn, the CFPB will be closely watching the conduct of the credit card industry.

FAQs
What is the US Consumer Financial Protection Bureau?
The CFPB is a US government agency responsible for regulating financial products and services and protecting consumers in the financial marketplace.

What is the Truth in Lending Act?
The Truth in Lending Act is a federal law in the US that aims to protect consumers against unfair credit billing and credit card practices.

What did Citizens Bank do to violate the Truth in Lending Act?
Citizens Bank automatically denied fraud claims and billing error notices in certain circumstances, neglected to fully refund charges and fees, and failed to issue mandatory acknowledgement letters and denial notices in response to billing errors.

When did Citizens Bank engage in this malpractice?
The malpractice began at least in 2010 and persisted into early 2016.

How much is the fine imposed by the US Consumer Financial Protection Bureau?
The fine amounts to $9 million.

How did Citizens Bank respond to the CFPB’s fine?
Citizens Bank said the issue impacted a small subset of its credit card customers and while it continues to disagree with the CFPB’s stance with respect to these long-resolved issues, which were self-identified and voluntarily addressed years ago, it is pleased to put this matter behind them.

Citizens Bank fined  million over fraud complaints
Citizens Bank fined $9 million over fraud complaints

Fraud complaints result in Citizens Bank receiving $9 million fine.

The U.S. Consumer Financial Protection Bureau (CFPB) has levied a $9m fine against Citizens Bank, one of the largest consumer banks in the country, for not adhering to federal financial consumer laws and mishandling credit card disputes, according to a judgment released on May 23. The agency had launched a lawsuit against the Rhode Island-based bank in 2020 for contravening the Truth in Lending Act, designed to protect consumers against improper credit billing and credit card practices. The CFPB claimed that the bank had automatically turned down billing error notices and fraud claims in certain situations, in addition to failing to issue mandatory denial notices and acknowledgement letters. Citizens Bank has to stop conducting fraud affidavits and guarantee that its credit card procedures adhere to the law as part of its penalty, besides contributing to the CFPB’s victims relief fund. The bank, which has branches in 14 states, said the issue only affected a small number of its credit card clients.

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