Citigroup to Issue Credit Card Refunds Due to Interest Rate Overcharges

Some Citigroup credit card holders may be surprised to be getting a refund after being charged too much interest on their Citi cards.
Citigroup, one of the largest U.S. credit card issuers, announced on Friday that it would refund about $330 million to consumers after uncovering overcharges in annual interest rates tied to 1.75 million credit card accounts.
Citigroup says the average refund will amount to about $190 per account — including interest.
“Of course, we are deeply disappointed and sincerely apologize to those affected. While we did identify the issue, it should have been identified sooner,” Citi said in a statement to cardholders. “We are taking every action possible to provide refunds as quickly as possible. If you were financially impacted, you do not need to take any action; we will contact you and you will receive a refund check.”
Refunds are expected to start later this year, the bank said.
The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 requires that lenders review U.S. credit card accounts every six months to determine if customers who have experienced an interest rate increase should receive a rate decrease. “These reviews, which we have conducted since 2011, have benefited many of our customers by lowering their interest rates,” Citi said.
Here’s how Citi explains what it found in its review:
“While we believed our methodology was sound, a periodic internal review identified potential flaws in the methodology being used to reevaluate interest rates that affected some cardholder accounts. We informed our regulators and revised our methodology going forward. We also conducted a comprehensive review to identify any customers who were impacted to determine how this happened to ensure it doesn’t happen again.
We estimate that 90% of the interest rate savings due to customers were delivered as required. However, some U.S. card accounts will receive refunds which we will be providing with interest.”

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