Citibank has agreed to pay $700 million to consumers, plus an additional $70 million in fines, for illegal and deceptive credit card practices, regulators said on Tuesday.
The Consumer Financial Protection Bureau (CFPB) said that 8.8 million customers will be compensated in the payout - which includes 7 million people overcharged directly by Citibank and another 1.8 million customers of the bank's subsidiaries - who were impacted by deceptive marketing and billing for credit card services and add-on products like debt protection and credit monitoring, according to CNN.
For example, the CFPB revealed that Citi charged consumers for memberships they were told were free during the first 30 days or for products they never received.
"We continue to uncover illegal credit card add-on practices that are costing unknowing consumers millions of dollars," said CFPB Director Richard Cordray in a statement, according to Forbes.
Citibank said it has already started paying back some consumers.
"Affected customers will automatically receive a statement credit or check and those no longer with Citi who are eligible will be mailed a check," Citibank said.
The bank said in a statement that it "fully cooperated" with the CFPB investigation and the first payments went out in 2013. The company added that it has set aside money for the remaining paybacks, according to Yahoo! News.
The action comes from the consumer watchdog agency established exactly five years ago under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Earlier this month, the agency took action against JPMorgan for selling bad credit card debt.
"In our four years, this is the 10th action we've taken against companies in this space for deceiving consumers," said Cordray, according to Forbes. "We will remain on the lookout for similar conduct and will address it as we find it."
