Citigroup Inc., the world’s biggest credit-card lender, was ordered to pay $700 million to customers and fined $70 million over illegal practices related to the bank’s marketing of card add-on products.
The U.S. Consumer Financial Protection Bureau and Office of the Comptroller of the Currency each fined the New York-based bank $35 million, the regulators said Tuesday in statements. The investigations were previously disclosed, and Citigroup has fully reserved for the costs associated with the settlements, the bank said in a separate statement.
“Citi previously discontinued sales of the products included in the agreements, which include credit monitoring and debt-protection products and wallet-protection services,” the lender said in its statement.
Citigroup began offering relief to customers in 2013, and has addressed more than 2 million of the 8.8 million affected clients, according to a person with knowledge of the process. The bank is mailing checks or providing statement credits for current customers, said the person, who asked not to be identified because the information hasn’t been made public.
The settlement amount is among the highest for a CFPB enforcement action since the agency began operating four years ago. Bank of America Corp. paid $783 million in April 2014 to end an investigation over similar practices.
Starting with its enforcement action against Capital One Financial Corp. in July 2012, the consumer bureau has focused on credit card add-on products. Through 10 enforcement actions, the bureau has alleged that the banks or their contractors misled consumers about what the products do, and what they cost.