Citigroup settles U.S. robo-signing case tied to consumer bankruptcies
Reuters
Published Sep 24, 2018 22:32
Updated Sep 24, 2018 22:50
Citigroup settles U.S. robo-signing case tied to consumer bankruptcies
By Jonathan Stempel
NEW YORK (Reuters) - Citigroup Inc (N:C) will pay $5 million to address "robo-signed" proofs of claim filed in consumer bankruptcy cases involving 71,448 Macy's-branded credit card accounts, the U.S. Department of Justice announced on Monday.
The proofs of claim were filed between 2012 and 2015 by employees of a third-party vendor who did not review their contents, and had been working on behalf of Citigroup affiliate Department Stores National Bank, which issued the accounts.
According to a filing with the U.S. bankruptcy court in Gainesville, Georgia, Citigroup learned of problems with the vendor's practices after it began servicing the accounts in July 2015, and notified the government the following month.
Citigroup has complied with applicable bankruptcy signing requirements since it began filing proofs of claim on DNSB's behalf, and has adopted procedures to avoid a recurrence, the filing said.
The $5 million payment will be distributed pro rata, with affected cardholders receiving refunds of about $70 each.
Citigroup, based in New York, said in a statement it was pleased to resolve the matter, and regretted any inconvenience to customers.
Macy's Inc (N:M) was not accused of wrongdoing.
Creditors file proofs of claim in bankruptcy cases to set forth how much they believe they should recover and why.
Robo-signing involves the systematic approval of documents that have not been read. The practice was a cause of the U.S. housing crisis last decade, enabling marginal borrowers to obtain loans they did not qualify for.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.