CFPB Files Lawsuit Against Citizens Bank For Numerous Violations

• According to the lawsuit, the bank has failed to adequately deal with disputes arising with its credit cards.
• Customers were not informed of any billing errors, and those who have filed claims for billing errors or misuse of cards have been automatically rejected.
• The Bank has violated TILA, CARD Act, FCBA, and CFPA as a consequence of its actions.

Citizens Bank has been sued by the Consumer Financial Protection Bureau (CFPB) for allegedly violating the Truth In Lending Act (TILA). The complaint has been submitted at the US District Court in Rhode Island.

According to the details presented in the lawsuit, the CFPB has claimed that Citizens Bank has not properly managed disputes that have arisen for credit cards and, hence, has violated the applicable rules included in the Fair Credit Billing Act (FCBA) amendments as well as the Credit Card Accountability Responsibility and Disclosure Act (CARD Act).

The complaint has detailed the manner in which Citizens Bank has inadequately handled its credit card complaints and issues faced by its customers. The Bank did not send any proper notification to its customers for any billing errors that occurred on credit cards, including any letters of acknowledgment. On top of it, any notices filed by customers to rectify billing errors or unauthorized use of their credit cards were automatically rejected, in some cases. The Bank also did not offer the claimed reimbursement against finance charges or fraud that customers had sought.

The lawsuit also highlighted that the bank has been in violation of TILA as well as Regulation Z for several years now by having failed to provide its customers with access to counseling referrals for credit card services to the customers who had requested access to the service.

Considering all of the abovementioned violations, the CFPB has filed the lawsuit to try and impose civil money penalties on the Bank. According to details presented in a press release, the Bank’s violations have breached the rules as stipulated under the Consumer Financial Protection Act (CFPA).

So far, 2020 has been a significant year for the CFPB. Earlier last month, the Bureau had revised the way it defined abusive practices by financial institutions in the country, which has been criticized by many industry experts as having made it easier for consumer finance firms to exploit customers, as fewer instances of abuse now fall under the definition of abusive practices.

Also, some states, such as California, are pushing for their own legislation to improve regulation of the consumer debt industry.

A case against Wells Fargo is also currently pending, whereby the CFPB has alleged numerous misdeeds by the bank, quoting a penalty amount of $4 billion so far.