It sounds like a sensationalistic headline, right? Stealing? Isn’t that too strong a word? Nope, it happens to be the truth. Citibank was actually removing excess cash from statements, and also stealing from the recently deceased. This is a another great reason to read your statements every month. But you’re doing this anyways, right? Have you ever overpaid on your credit cards? I have, and that’s because I auto-pay my credit cards a set amount every month through my on-line banking payment system. From the press release by the California attorney general: http://ag.ca.gov/newsalerts/release.php?id=1602:

California Attorney General Edmund G. Brown Jr. today announced that he has reached a settlement with Citibank after a three-year investigation into the company’s use of an illegal “account sweeping” program. Nationally, the company took more than $14 million from its customers, including $1.6 million from California residents, through the use of a computer program that wrongfully swept positive account balances from credit-card customer accounts into Citibank’s general fund.

“The company knowingly stole from its customers, mostly poor people and the recently deceased, when it designed and implemented the sweeps,” Attorney General Brown said. “When a whistle blower uncovered the scam and brought it to his superiors, they buried the information and continued the illegal practice.”

Between 1992 and 2003, Citibank employed a computerized “credit sweep” process to automatically remove positive or credit balances from credit-card customer accounts. An account could show a credit balance if a customer double-paid a bill or returned a purchase for credit. The credit sweeps were done without notifying the customer and without regard for whether the customer had any unpaid balances or other charges owed to Citibank.

Have you had a Citibank Card in recent years? Tell us about it!

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