Citi Owes Cardholders $330 Million

If you are one of 1.75 million Citi cardholders who were charged too much interest, expect a refund of around $190 to come back to you soon. The major credit card issuer announced that they would give back the money after a semi-annual review discovered many were charged the wrong amount of interest on balances.

Citi credit card holders who missed a payment to have their interest increase could be in line for a refund, after the bank admitted they accidentally overcharged customers at higher rates. CNN Money reports Citi will issue $330 million to 1.75 million credit card holders who were charged too much interest on their accounts.

The situation was first discovered in 2016, when Citi notified regulatory bodies of an error in their account identification for rate reduction. The problems were identified as a “human error” instead of a computer-based problem, resulting in a deep dive into accounts opened since the CARD Act was passed in 2011.

As a result, the company identified 1.75 million cardholders who were eligible for a lower interest rate, but were either skipped for a rate reduction, or received a lower rate reduction than what they qualified for. Now the bank will return money to those customers affected by the issue.

“While we believed our methodology was sound, a periodic internal review identified potential flaws in the methodology used to reevaluate interest rates on some credit card accounts,” said Liz Fogarty from Citi to CNN Money. “We sincerely apologize to our customers and are taking every action to provide refunds as quickly as possible.”

Although the refunds will provide some return for those affected by the erroneous charges, cardholders should not expect to get a major refund back. The average refund cardholders will receive is around $190, including interest.

This is not the first time a bank has faced accusations of taking money from unsuspecting consumers. In 2016, the Consumer Financial Protection Bureau discovered Wells Fargo was opening credit accounts on behalf of account holders who never applied for the products.

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