Citibank will pay back more than $3.3 million to about 39.500 of its current and former customers, after failing to refund them when they closed a credit card account with an outstanding balance.
Specifically, the refunds relate to Citibank, Virgin Money, Bank of Queensland, Suncorp and Card Services-branded credit cards, as well as Citibank Ready Credit loan customers. The bank is the credit provider for all these products, says The Sydney Morning Herald.
Everything started more than 20 years ago
In an official statement released this week, The Australian Securities and Investments Commission (ASIC) revealed some of the errors which led to closing these accounts had occurred as far back as 1994.
Citibank will finish contacting all affected customers by November 30. They will get a refund of the credit balance with interest, through a bank cheque or directly into their account.
“Customers should be confident that when they close an account, they are refunded any outstanding balance,” said ASIC deputy chairman Peter Kell.
The bank reported this issue to the regular and worked alongside in order to fix it.
As for the rest of the amount, until $4.3 million, Citibank will refund it to another 4000 customers, after somehow managing to mislead them about its responsibilities to investigate unauthorised transactions on their accounts.
Apparently, the bank had refused customers’ requests regarding investigating unauthorised transactions, claiming that they were made outside a time period allowed by Visa and MasterCard.
A mistake backed by faulty systems?
“Citibank incorrectly stated that because the request was made outside the timeframe specified by Visa and MasterCard, it was not required to assess the claim, and that the customer’s only options were to approach the merchant or a fair trading agency,” ASIC said.
It looks like the customers were misled by a letter informing them about their protections under the ePayments Code. The latter provides consumers protections for unauthorised transactions.
One of Citibank spokespersons said that, in the mean time, they have strengthened the systems, in order to avoid dealing with such errors again.
