Bureau files suit, claiming RI bank denied consumers’ billing error notices, failed to refund charges

Automatically denying consumers’ billing error notices – and claims of unauthorized use in certain circumstances – earned a Rhode Island bank a lawsuit from the federal consumer financial protection agency with eight counts of violations of consumer protection laws, the agency said Thursday.

In a release, the Consumer Financial Protection Bureau (CFPB) said it filed suit Thursday against Citizens Bank, N.A., of Providence, R.I., alleging violations of the Truth in Lending Act (TILA) and TILA’s implementing Regulation Z, including violations of amendments to TILA contained in the Fair Credit Billing Act (FCBA) and the Credit Card Accountability Responsibility and Disclosure Act (CARD Act).

The bureau’s action seeks: enjoining the bank from committing future violations of the statutes; “monetary relief as the Court finds necessary to redress injury to consumers,” including damages, restitution and refunds; disgorgement of any ill-gotten gains from the bank; award of civil money penalties (CMPs); and any additional relief the court deems “just and proper.”

Under the complaint, CFPB alleges that for several years Citizens violated TILA, as amended by the FCBA, and Regulation Z by failing to properly manage and respond to credit card disputes. In addition to the charge the agency made that the bank automatically denied consumer billing error notices and claims of unauthorized use (in some cases), CFPB also claimed that the bank failed to fully refund finance charges and fees when consumers asserted meritorious disputes or fraud claims.

The bank also failed, CFPB said, to send consumers required acknowledgement letters and denial notices in response to billing error notices. The complaint also charges that for several years Citizens violated TILA by violating provisions passed under the CARD Act. “The Bureau alleges that Citizens violated TILA and Regulation Z by failing to provide credit counseling referrals to consumers who called Citizens’ toll-free number designated for that purpose.

“These alleged violations of TILA – including those under the FCBA and the CARD Act – and Regulation Z also constitute violations of the Consumer Financial Protection Act,” CFPB said.

The bureau noted that the complaint is not a finding or ruling that Citizens has violated the law.

Consumer Financial Protection Bureau Announces Action Against Citizens Bank, N.A.