Credit card customers to receive unexpected windfall

Credit card customers to receive unexpected windfall

Close to 40,000 Australian banking customers are set to share in refunds worth over $4.3 million as two separate errors were found to have caused losses for customers of Citibank products.

Around 35,000 past and current credit card account holders will be refunded more than $3.3 million, according to ASIC, after the bank failed to refund customers when accounts were closed with an outstanding balance.

In some instances, dating as far back as 1994, the refunds of credit once accounts were closed did not always occur.

As well as Citibank branded card holders and Citibank Ready Credit loan customers, affected customers with Virgin Money, Bank of Queensland, Suncorp and Card Services will also receive refunds, given that Citibank is the credit provider for all of these cards.

The refunds will include the original credit balance plus interest, making it a potentially sizeable windfall for customers whose accounts have been closed years or even decades ago.

Current account holders will be credited with, while former customers will receive a bank cheque. While Citibank is writing to all affected customers, ASIC Deputy Chair Peter Kell advised anyone who believes they may be among those affected customers to come forward.

“If you think you might be impacted, your money may be with ASIC as unclaimed money. I strongly encourage you to search your name on ASIC’s MoneySmart unclaimed money search,” he said.

Meanwhile a further 4,000 former and current customers have been refunded more than $1 million after the global banking giant was found to have misled them on their rights under the ePayments Code.

“Citibank had refused customers’ requests to investigate unauthorised transactions because it claimed the requests were made outside the time period permitted under the Visa and MasterCard scheme chargeback protections,” ASIC said in a statement.

“In letters sent to customers in response to their requests, Citibank incorrectly stated that because the request was made outside the time frame specified by Visa and MasterCard, it was not required to assess the claim, and that the customers’ only options were to approach the merchant or a fair trading agency.”

The case highlighted that banking customers have legislated protections to which banks are bound to comply.

“If an unauthorised payment has been made on their account, customers should be confident that their bank will appropriately investigate the payment. Customers should never be misled about their rights under the code,” said Mr Kell.

Credit card customers to receive unexpected windfall
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