Shame on you, Citibank

Between 1992 and 2003, Citibank operated an “automatic sweeping” program that would without notice remove positive balances from customers’ credit card accounts—mainly those of the poor and the recently deceased—and pocketing the money. Now it’s been ordered to pay back $14 million dollars to the affected customers, plus another $3.5 million in penalties to California, thanks to California Attorney General Edmund G. Brown Jr..

According to the article, in July of 2001 a Citibank employee uncovered the practice and brought it to the attention of his superiors. The employee was later fired for discussing the credit sweeps with an internal audit team. Niiiiiiiiiiice.

In one of the most outrageous examples of gargantuan kahunas and at the same time an obvious effort to win the Biggest Asshat of the Year contest, one executive apparently said (according to the press release of the California Attorney General), “Stealing from our customers is a business decision, not a legal decision.” The same executive later said that the sweep program could not be stopped because it would reduce the executive bonus pool.

And we wonder why the average American hates corporations.

So now Citibank has to pay back the money (they say they’ve already started). And their penalty for stealing from their customers?

Well, the state gets $3.5 million. And they should.

The affected customers? They get the amount that was stolen plus 10% interest.

Ten percent?

This was a broad conspiracy to commit theft, and abuse of fiduciary responsibility! It wasn’t a corporation that made this decision, it was flesh and blood men and women who made a decision to abuse their position of trust for their own profit. The executives responsible should be prosecuted criminally for their deeds.

And the whistleblower should be compensated handsomely. Unlike Citibank customers.

A ten percent penalty? That’s barely interest on a loan, and this was no loan. This wasn’t punishment. Forget “slap on the wrist”. This is more like a light breeze, without even enough power to make the hair on their wrists move. Gee, that will make Citibank and others who have engaged in this same type of deception quiver. Methinks there is the sound of laughter, popping corks and the tinkle of champagne glasses being clinked going on in the Citibank boardroom this week.

Attorney General Bob Butterworth, are you listening? Did this happen here in Florida, too? If so, I hope you pursue it.

And I hope you make Citibank really pay.


4 Responses to “Shame on you, Citibank”

  1. Carina Says:

    The moment Citibank bought out CalFed, I thought it was great. As a college student, I loved having different cards and citibank sure gave me a different cool card (see through dollar green that kind of glowed in my wallet, yea I like pretty things, sue me!).

    Fast forward to about 7 years later and Citibank has really shot itself in the foot where I’m concerned — rising bank fees and their “platinum” account where if you held XXX amount of dollars, you wouldn’t have to pay a fee is suddenly changed – they changed the actual dollar amount you had to have. Not by a piddly 5-10k, but try 20,000.

    Needless to say , the moment I realized this, I paid the last of the bills and withdrew ALL the money and went to Washington Mutual.

    Irony of ironies? Seems Citibank decided to charge me the month’s banking fee AFTER I had shut the account down, claiming that it had already gone through…I refused to pay the fee citing that the account had been closed — why try to milk a dead cow? So they put in me collections…for a piddly $20. I’m stubborn and I still refuse to pay it. When we were buying our home, the mortgage company looked at that and when I explained it, they laughed hard and long. It still counted against me, but they seemed to get a laugh out of relaying the story to others. The underwriter even snickered.

    Nice to see we were a source of amusement to some.

    Now that I see what Citibank has done, I sincerely hope that they pay through the nose and the a**.

    I’m not thrilled with Washington Mutual (we won’t start on THAT other topic) but out of all the banks I’ve dealt with — Wells Fargo aka HELLS FARGO, Citibank and Bank of America — I’ll take my minuscule problems with WaMu over those other fuckleberries any day.

  2. mccainmyths Says:


    You’re right, Citibank sucks. I had them from college, and it went steadily downhill. I cancelled after 11 years, and they said, “but you’ve been with us for eleven years!” and I said “that must be why I’m so heartily sick of Citibank”.

    My mother complains about Washington Mutual (ever since they took over Home Savings), from personal experience, Wells Fargo and Bank of America also suck. I used to like Union Bank, but they went downhill as well so I fired them.

    Consider trying Schwab bank. That’s who I switched to after I fired Union Bank of California, and I could hardly be happier so far. I get free checking, and since they don’t have any branches (they have one in Nevada) you get reimbursed for any ATM charges at the end of the month. I can’t tell you how convenient it is to be able to use ANY ATM anywhere I go and not fret over the ATM fees, I know I’ll get them back at the end of the month. Every time I call, the employees are incredibly helpful, better than any bank I’ve ever used, and even when I call at 7 or 8 o’clock at night, I end up talking to a customer service representative in Denver, not someone in India who claims his English is perfect, mine is the problem (its happened with another company, his accent was so thick, I couldn’t understand him).

  3. WealthiHer Blog Network » Blog Archive » Carnival of Personal Finance at BankerGirl Says:

    […] This Way – Shame on You, Citibank.  I hate reading about banks taking advantage of customers, and here’s another […]

  4. Carnival of Personal Finance at BankerGirl - Articles, tips and advice on how to become debt free in 2009 (and beyond…) - Debt Free in 2009 Says:

    […] This Way – Shame on You, Citibank.  I hate reading about banks taking advantage of customers, and here’s another […]

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