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.
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.