Citizens Financial Group Inc. has been ordered to pay $31.5
million for failing to credit the full amount of money customers
deposited into their accounts.
The order was part of a joint enforcement action announced
Wednesday by the Consumer Financial Protection Bureau, Federal
Deposit Insurance Corporation and the Office of the Comptroller of
the Currency.
The CFPB's investigation found that Citizens didn't always give
consumers full credit when the amount scanned on the deposit slip
was less than the amount of the checks and cash customers actually
deposited. The investigation looked at practices from January 2008
through November 2013 and found that the bank violated the
Dodd-Frank law in not fixing the discrepancies. The bank's actions
resulted in consumers being shorted millions of dollars over the
years, the CFPB said.
The bureau said Citizens falsely told customers it would verify
their deposits even though the bank's policy was to verify and
correct deposit inaccuracies only if they were above $25 or $50
thresholds.
Citizens is neither admitting or denying wrongdoing and said it
is working with regulators to compensate customers quickly.
A spokeswoman said the bank used certain practices to "ensure
the next-day crediting of deposits in situations when deposit slips
contained mathematical errors. However, these past practices and
disclosures, principally before early 2011, could have been
better." The bank implemented a new teller system in the fourth
quarter of 2013, she said.
In addition to under-crediting customers, the errors on the
deposit slips also over-credited some depositors, the spokeswoman
said. Customers who were over credited will keep the additional
funds and those who were under credited will be reimbursed, she
said.
The bank will have to pay about $11 million in refunds to
consumers and a $7.5 million penalty for the violations to the
CFPB. The FDIC also ordered a $3 million civil penalty, and the OCC
ordered a $10 million penalty.
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com
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