NEW YORK — Citigroup Inc. will pay nearly $18 million in refunds and settlement charges for taking $14 million from customers' credit card accounts, California Atty. Gen. Jerry Brown said Tuesday.
Citigroup will make refunds to the 53,000 customers affected and pay $3.5 million in damages and civil penalties to the state of California, which had been investigating the questionable practices for three years, Brown said.
The bank will also pay 10% interest to California customers, who accounted for $1.6 million of the money "swept" out of accounts and into a Citi fund between 1992 and 2003.
Citigroup's "account sweeping program" automatically removed positive balances from customers' credit card accounts, Brown said. For instance, if a customer double-paid a bill by mistake or returned a purchase for credit, the positive balance was taken from the customer without notification, he said.
