CFPB sues Citizens Bank for failing to respond to credit card disputes

This week, the Consumer Financial Protection Bureau filed suit against Citizens Bank, alleging violations of the Truth in Lending Act (TILA), including implementing Regulation Z and the Credit Card Accountability Responsibility and Disclosure Act.

The CFPB alleges that the bank violated TILA for several years by failing to “properly manage and respond to credit card disputes,” a CFPB statement noted.

According to court documents, since at least 2010 through June 2015, Citizens denied consumers’ unauthorized use claims and billing error notices in numerous instances because consumers failed to return an affidavit required by the bank.

Other allegations include that Citizens Bank failed to consistently refund finance charges and fees on billing error notices and unauthorized use claims; notify consumers about claim status; and provide credit counseling referrals.

The CFPB filed its complaint with the U.S. District Court for the District of Rhode Island on Jan. 30. The complaint seeks to “permanently enjoin Citizens from committing future violations” and impose monetary relief as the court finds necessary to “redress injury to consumers,” along with unspecified civil money penalties.

For its part, Citizens maintained that the complaint affected a “very small subset” of Citizens credit card customers a number of years ago and that bank will “vigorously challenge” the action.

“We are puzzled and disappointed by the CFPB’s stance with respect to these long-resolved issues,” Stephen Gannon, general counsel of Citizens, said in a statement. “The CFPB’s demands are wholly disproportionate to the issues at hand, and we strongly believe that the Bureau’s claims are unwarranted on both facts and the law.”

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