FreFly

Apparently at least some CITI CCs treat charges from financial institutions as cash advances. My mortgage processing fee (not a payment) appeared on my statement as a cash advance. The mortgage bank says they did a regular charge, they cannot do a cash advance for this transaction. CITI rep claims there was a notice saying that CITI will treat all financial institution charges as a cash advance, but agreed to remove the charges and fees as one-time exception.

Treating something that is not a cash advance as a cash advance is a highly misleading practice that appears to be relatively new. What's next -- charges by state agencies (like DMV) treated as cash advances?

To avoid surprises, it would be helpful to compile a list of CCs that do this. I'll start: CITI Platinum Amex.

deant

This is probably a result of shutting down the opening of bank accounts with credit cards. Citi probably just put in a software fix to code all financial institution transactions as cash advance.

biggestbopper

I wouldn't say "just." This is a quasi fraudulent change in practices and terms without communicating the change to card users.

I got caught by this a few months ago and disputed the charge in writing with proof of delivery. So far, no response from bank (in violation of Fair Credit Billing Act).

Now, am pondering next step.

I'd love to hear from others in the more or less same situation and what they have done about it.

I'm starting to smell a class action.

FreFly

I agree that such practice should be illegal. When a consumer makes a charge, it should be clear that it will be treated as a cash advance, without having to go though all fine print a particular card send her.

Did you ask for a refund of fees and interest? I got a "one-time" refund.

Which CC did you have a problem with?

biggestbopper

A Citi AA card.

No refund--that's one reason I'm ticked.

Of course, I did get a gazillion miles from Citi earlier, so that sort of balances it off a bit.

Interestingly, Citi, when I called about this months ago, claims that they have a tape that shows I agreed to the charges (not so), but, they refuse to provide a copy of the tape, a transcript, or the "summary," which is all the rep I talked to had.

FreFly

Good luck with your dispute.

My CITI representative said they send changes to T&C stating that they will treat financial institution charges as cash advances. Since I got a refund, I did not check, but it is possible that they did.

Even if they did, this is a bad practice because CCs are inconsistent in classifying businesses and it is hard for consumers to know how a particular business is classified. Also, what if CITI sends a T&C change tomorrow saying that any business that has an ATM on premises is classified as a financial institution?

So it is possible that all CITI cards classify such charges as cash advances. Any counter-example? What about other issuers?

Beetleman

I too had the same experience. Because we'd charged credit application on one card and appraisal fee on another I had to call twice about it. The woman that I spoke to about the appraisal fee was quite nice and said she would reclassify it as a purchase. The second time I called the woman on the phone seemed completely clueless and insisted that the bank must have asked for a cash advance. Then I asked for a supervisor who begrudgingly moved it to a purchase and waived the fees but said that I might get a few cents of interest (50 cents or so) but that "she's sure I could manage that."
She added that I should understand that when a bank charges your card it's a cash advance.

I intend to write a letter about this to someone. It seems a pretty slimy policy.

FreFly

Which two cards did you use?

I wonder how widespread this practice is, both within CITI and among other CC issuers.

benmaller

I had a recent AMEX gift card purchase using my Citi AA Amex card charged as a cash advance. I was told same as above, Due to the new federal rules Citi will treat all charges from financial institutions as a cash advance. They did refund my charges this time.

I have two major issues with this:
1.) There's no indication when the charge happens that it will be a cash advance and have the associated fees and interest.

2.) What are they going to treat as a financial institution? Wasn't WalMart trying to get status as a bank awhile back?

biggestbopper

Just what purported federal rules require this. Beyond those dreamed of in the fevered imagination in the mind of a banker trying to justify certain actions?

I am investigating this a little more and would be happy to receive PMS from those who are ticked off and may want to do something about it.

I find the claims that this was disclosed a bit odd since I read all the stuff that Citi sends me and haven't seen anything about this change.

Why was Citi putting charges to fund bank accounts as charges through for years and why the sudden, without notification, change to treating them as cash advances?

deant

Because they were making a "mistake" for all those years. Now they are just following the letter of their T&Cs. Since they are now just following their written "rules", no notification is required.

coolguy100

I called and set all my citi card cash advance line to be zero to avoid unexpected cash advance treatment. I tried to fund chase checking account using ciiti card and got rejected.

I tried to transfer fund from citi card to my perkstreet checking account, which perkstreet claims to treat as purchase with 2.5% fee. the transfer failed as well.

it seems citi treats all the funding as cash adance now. there is no way to use this method to meet the minimum purchase requirements for AA cards.

Ritz

I've actually done this myself and it worked for me. Even recently with new cards (both Citi and non-Citi), I've basically forced Citi to categorize the obligatory charge as a charge, not an advance. It's gone through as a charge every time. Hope this helps.

craigf

Are any other banks doing this? Or just Citi?

thehawk75

This 'new federal rules' seems to be the catch all phrase when the CSR doesn't know what they're talking about and too lazy to do research, or, when the CC company is trying to f*ck you over in general.

Not once has any CSR ever been remotely accurate when they've made the 'new federal rules' comment to me about anything...