Citizens pays $2M after accusations of charging credit-monitoring customers for undelivered service

CITIZENS BANK NA last month agreed to pay a $2 million penalty to the U.S. Comptroller of the Currency.
CITIZENS BANK NA last month agreed to pay a $2 million penalty to the U.S. Comptroller of the Currency.

PROVIDENCE – Citizens Bank NA last month agreed to pay a $2 million penalty to the U.S. Comptroller of the Currency after being accused of charging credit-monitoring customers for undelivered service and failing to credit debt customers under qualifying circumstances.
The Office of the Comptroller of the Currency, a federal bureau within the U.S. Department of the Treasury, conducted an investigation into Citizens and identified deficiencies in its practices related to billing and marketing that violated the Federal Trade Commission Act, according to a consent order.
Between 2008 and 2014, the bank and its vendors marketed and sold identity protection products, including credit monitoring and credit report retrieval services. Customers who did not complete the personal verification process with the bank would not receive the services, but the bank would collect the full service fee, according to the order.
The OCC says Citizens “retained a portion of the fees paid by the identity protection products customers, including fees paid by the customers who were not receiving the credit monitoring and credit report retrieval services.” The OCC describes this as “unfair practices” in violation of the FTC Act.
“The bank’s violations … caused substantial consumer injury,” according to the order.
Between 2005 and 2013, the bank also marketed and sold a debt collection product to customers, which included cancellation of some or all of a customer’s credit card balance under certain qualifying events, according to the OCC.
The bank and its vendors, however, “may have denied the claim or miscalculated the amount of the benefit,” according to the OCC. Also, a small number of customers, between 2005 and 2012, were not credited for debt cancellation fees imposed on their accounts, despite ending service agreement contracts within an allowed 30-day review period, according to the order.
Providence-based Citizens Bank, a Citizens Financial Group Inc. company, agreed pay a penalty of $2 million in November, and by consenting, Citizens does not have to admit or deny any wrongdoing.
The OCC made the consent order documents available on its website last week.
Vendors of Citizens named in the order include: Affinion Group, CPP North America (now known as AMT Consumer Services Inc.) and Central States Indemnity Co.
A Citizens representative could not be immediately reached for comment Tuesday morning.

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