Aug 13, 2015 11:59 AM

Citizens Bank must refund customers $11 million over deposit discrepancies

The federal Consumer Financial Protection Bureau has ordered Citizens Bank to refund customers $11 million and pay a $7.5 million penalty following an investigation into deposit discrepancies at the largest bank in N.H.

According to the Union Leader, the problem arose when amounts on a deposit slip and the actual funds deposited failed to match. In these cases, Citizens Bank, under some circumstances, failed to credit customers the full amounts of their deposited funds, according to the federal watchdog agency.

“Citizens Bank regularly denied customers the full credits of their deposits when there were discrepancies between deposit slips and the actual money transferred into the bank,” said CFPB Director Richard Cordray. “The bank chose to ignore these discrepancies and harmed many consumers by pocketing the difference.”

The CFPB found that from Jan. 1, 2008 to Nov. 30, 2013, Citizens Bank violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition on unfair and deceptive practices by failing to properly credit checking and savings accounts.

In cases where the bank’s scanner misread either the deposit slip or the checks, or if the total on the deposit slip did not equal the total of the actual checks, Citizens Bank did not fix the mistake if it fell below a certain dollar amount.

“Over the years, by ignoring the discrepancies, the bank shorted consumers millions of dollars,” said Cordray.

Citizens Bank must pay $11 million directly to consumers who did not receive all the money that should have been deposited into their accounts, including any overdraft fees, insufficient funds fees, and monthly maintenance fees that were triggered by the bank’s actions.

The bank must also include a reasonable estimate of interest on these amounts.

Lauren DiGeronimo, vice president for media relations at Citizens Financial Group, said the bank ended the practice several years ago. DiGeronimo said the bank is now working with regulators to make restitution as quickly as possible.

If customers have an open account with the bank, they will receive a credit to their account. For closed accounts, Citizens Bank will send a check to the affected consumers.

“Customers who were over-credited will keep the excess funds applied to their accounts and customers who were under-credited will be reimbursed,” she said. “We have adequate reserves to cover the redress and fines.”


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