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Customers were overcharged when CGMI failed to rebate certain customers’ accounts after periods of inactivity when fees should not have been charged. CGMI identified the overcharges as part of an internal review conducted in cooperation with the attorney general’s investigation of CGMI fees.
The investigation previously led to $16 million in principal and interest going back to 31,000 CGMI customers.
“My office will work with any financial institution that identifies and wants to correct an error that harmed its customers. In this case, Citi’s cooperation with our investigation will result in $20.5 million being refunded to tens of thousands of Citi customers in New York and elsewhere,” said Schneiderman. “I want to thank Citi for its continued cooperation with our investigation, which has ensured that Citi customers are getting back the money they deserve.”
For various reasons, a CGMI customer’s account may be frozen during a particular period of inactivity. In some cases, customers should not be charged fees during that period. CGMI’s review revealed that if a customer requested a refund of prospectively paid fees that covered a period when the customer’s account was frozen, CGMI sometimes rebated the fees to the customer. However, CGMI’s review revealed that thousands of customers who were overcharged fees during frozen periods were not allocated rebates they should have received, either because they did not request a rebate, or because CGMI did not have policies and procedures in place to determine when rebates were appropriate.
The attorney general’s investigation of CGMI began in 2012 after a complaint from a Westchester resident led the attorney general to investigate fee overcharge issues at CGMI.
More than 2,700 New York customers are set to receive a total of approximately $657,000.
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