Citibank Settles Claims of Theft after Three Year Investigation

After a three year investigation, Citibank agreed to pay $3.5 million to the state of California to resolve a lawsuit alleging that the company stole funds from its customers’ accounts.  In particular, the suit alleged that Citibank illegally employed a computerized “credit sweep” process that automatically removed positive or credit balances from credit-card customer accounts in recovery status.   According to Attorney General Jerry Brown, over 53,000 customers were affected by the bank’s scheme including customers who were deceased, bankrupt, or the target of prior litigation or collection efforts by Citibank.  The whistleblower who questioned the bank’s unlawful practice will receive $300,000.   The settlement also requires repayment of more than $14 million dollars to customers damaged by the illegal credit sweeps. 

Tagged: False Claims Act (FCA), Whistleblower Laws (Federal)