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Millions to be refunded following Citibank error

A total of $4.3 million is to be refunded to thousands of Citibank credit card customers due to an error on accounts.

The consumer division of Citigroup has revealed that more than 40,000 credit card holders will be refunded after Citibank failed to reimburse customers whose accounts were closed with an outstanding balance, or weren’t compensated for unauthorised transactions made using their card details.

The error occurred on accounts existing as far back as 1994.

Roughly 39,500 customers who held Citibank and Citibank-funded products (including those under the Virgin Money, Bank of Queensland, Suncorp and Card Services brands) as well as Citibank credit loan customers will be refunded over $3.3 million in total.

Citibank has said that it is writing to eligible customers to advise that they will receive a refund of the credit balance with interest. Former customers will receive a bank cheque and current customers with an open account will receive a direct credit into their account.


The closed credit card and loan accounts with more than $500 in credit balances, which were not transacted on for seven years (or three years as applicable) have been transferred to ASIC as required under unclaimed money legislation.

The bank has said that it has now “strengthened” its systems so that cheques for credit balances are issued to customers automatically when they close their accounts.

“Customers should be confident that when they close an account, they are refunded any outstanding balance,” ASIC deputy chair Peter Kell said.

“If you think you might be impacted, your money may be with ASIC as unclaimed money. I strongly encourage you to search your name on ASIC’s MoneySmart unclaimed money search.”

Unauthorised transactions refund


As well as this, around 4,000 current and former Citibank customers have been refunded more than $1 million after the bank misstated its obligations around unauthorised transactions.

Citibank had refused customers’ requests to investigate unauthorised transactions because it claimed that the requests were made outside the time period permitted under the Visa and MasterCard scheme charge-back protections.

Affected customers had made reports to Citibank about “card not present” unauthorised transactions (such as internet transactions), where a payment was made using the credit or debit card number details, rather than the physical card itself.

The bank had reportedly “incorrectly stated that because the request was made outside the time frame specified by Visa and MasterCard, it was not required to assess the claim, and that the customer’s only options were to approach the merchant or a fair trading agency”.

ASIC found that this letter would likely have “misled customers about their protections under the ePayments Code”, which protects consumers for unauthorised transactions and are separate to the protections provided by Visa and MasterCard.

Citibank has also reviewed its processes to ensure that there are no further miscommunications about its obligations under the ePayments Code.

“If an unauthorised payment has been made on their account, customers should be confident that their bank will appropriately investigate the payment. Customers should never be misled about their rights under the code,” Mr Kell noted.

“Banks should ensure in all their communications that they are clear and accurate with customers about their consumer rights.”

The news of the refunds came just a day after Citibank released research regarding customer satisfaction with credit card rewards programs.

The research, commissioned by Citi Australia, reported that 38 per cent of Australians are unsatisfied with their credit card rewards program.

Citi Australia has launched a new rewards offer for its credit cards, inviting Australians to apply for a new Citi credit card and receive up to 150,000 bonus points.

“Regulatory changes have impacted credit card rewards across the board in 2017; however, we have seen that rewards points, alongside merchant acceptance, are still one of the most desirable offerings for current and new cardholders,” head of cards and loans at Citi Australia Alan Machet said.

“Through Citi’s latest rewards proposition, we want to put the power back in cardholders’ hands, providing them the flexibility of benefits they value, as well as enjoyable opportunities on us — whether it’s a trip to Thailand or a Christmas gift for themselves or a loved one.”

[Related: Property crash won’t be ‘that bad’: Citibank]

Millions to be refunded following Citibank error

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Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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