Citibank has agreed to pay $1.6 million as part of a settlement with 27 states regarding the firms credit card telemarketing solicitation practices.
The agreement settles a multi-state, two-year investigation — led by the attorneys general in Illinois, New York, California and Vermont — of consumer complaints about the marketing practices of Citibank’s business partners.
“When a company sells its customer lists to telemarketers, it has some obligation to protect these consumers from unfair and deceptive solicitations,” said Illinois Attorney General James Ryan in a statement. “This agreement will hold Citibank responsible for the way these telemarketers do business with Citibank customers.”
According to Ryan’s office, the investigation revealed that since the mid-1990s, Citibank received a percentage of sales made by companies selling various products and services to bank customers. Consumers complained that pitches by these companies resulted in consumers being charged for products and services that they did not knowingly agree to purchase.
In some cases, telemarketers promoted free trial offers on dental plans or credit card loss protection service. When the trial period ended, consumers did not understand that the companies would charge their credit card for continued use unless the consumers canceled during the trial period.
While Citibank admits no wrongdoing, it has agreed to pay $1.6 million to the states.
In a statement, Citibank noted that it began over two years ago implementing many of the initiatives in the agreement. The initiatives include prohibiting customer charges unless there is express authorization of the account holder; requiring the bank to review and approve all telemarketing scripts and materials; requiring telemarketing firms to comply with all applicable consumer protection laws; and requiring disclosure of the identity of the telemarketing company if the script makes reference to Citibank.
The states involved in the settlements are: Arizona, California, Colorado, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Mississippi, Montana, Nevada, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Vermont, Washington, and Wisconsin. Puerto Rico also joined in the settlement.
