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Consumer board orders bank to pay millions for consumer fraud

Many Tennessee residents have been victims of fraudulent marketing strategies by credit card companies where consumers are duped into signing up for credit cards and services without being informed of the complete costs and consequences of such memberships. Consumers often end up paying much more than they were told prior to making the purchase.

Recently, the Consumer Financial Protection Bureau ordered Citibank and its subsidiaries to pay $700 million in damages for duping millions of consumers with deceptive marketing strategies. It was proven that Citibank and its subsidiaries had engaged in illegal practices for a period of nine years, beginning in 2003. Such practices included non-disclosure of the full cost of consumer financial products, charging for services that were stated as free and urging customers agree to credit card add-ons by using vague and misleading questions.

It was also found that Citibank charged credit-card customers with certain kinds of accounts for services that were not provided by those accounts. Citibank also registered customers for notifications services, which they promised would inform customers of fraudulent transactions made on their accounts. However, the service only provided changes of customer credit files maintained by credit reporting firms, not fraudulent transactions. Citibank has already started compensating millions of customers for these actions by refunding specific amounts to affected card holders. Citibank is also barred from marketing add-on products until it submits a compliance plan to the CFPB.

It is easy to fall prey to deceptive marketing strategies of credit card companies. If a consumer is paying more than informed or the promises made by the telemarketing agent of a credit card company turned out to be false, consult a lawyer to understand if you are a victim of fraudulent practice and perhaps entitled to damages.

Source: USA Today, "Citi to pay $700M for deceptive credit card marketing," Kevin McCoy, July 21, 2015

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

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