Dear Mr. Pandit,
I would like to bring to your attention a matter which may have escaped your purview. In October of 2009, your company sent opt out notices to certain credit card holders. Recipients of the letter were given two options: close their credit card accounts and maintain their current interest rate or keep their accounts open and pay 29.99% interest, a punitive rate generally reserved for consumers who default on their payment obligations. It is my understanding that consumers who failed to respond by the designated opt-out date would automatically have their rates increased.
This week, I began receiving comments from consumers who, for one reason or another, failed to read or understand the opt out letters your company sent last fall. Personally, I believe many of them simply mistook these notices for junk mail and tossed them in the garbage. Regardless of the cause, these clients are paying dearly for the mistake.
Unfortunately, I have learned that Citi’s customer service department is telling some of these clients that nothing can be done to get their interest rates reduced from 29.99%. One of your clients, who wants nothing more than to have her previous rate restored so she can afford to repay her obligations, informed me she was told to contact a credit counseling firm. In other words, your company is turning its back on honest clients seeking to repay their debts.
You recently launched a website at new.citi.com, in which you appear in a video titled, “Our focus? Our clients. Period.” In this video, the COO of Citi Cards states that, “customers are…the sole reason we exist.” In the same video, a credit specialist from your organization states that, “we want our customers to feel like we care about them and we are going to do whatever it takes to help them get that way.”
I would like to believe that the message you are broadcasting to the world represents the true intent of Citi management. However, it is difficult to reconcile your message of concern with reality. Your customers are begging you to treat them fairly. And your company is turning its back on them.
Mr. Pandit, I implore you to listen to the pleas of your clients and allow them to opt out of the punitive 29.99% credit card rates they unknowingly accepted by failing to open a piece of mail from your company. If you truly care about your clients, this is your opportunity to show them that your public statements are more than corporate propaganda.
Regards
Jeffrey Weber
You May Be Interested In
- Tips to Help Choose Credit Cards with 0% Rates on Purchases
- Capital One Venture Card Customer Service Impresses
- It Never Hurts To Ask: How To Use Credit Card Customer Service To Reduce Fees And Increase Rewards
- October 2011 Report on the Balance Transfer Credit Card Market
Credit card users often see advertisements for cards that offer a 0% intro APR on balance transfers. What is less prominent are 0% promotional APRs on purchases. While these promotional [...]
Before a recent trip to the Caribbean, I opted to swap out my Capital One No Hassle Cash Rewards card for the Capital One Venture card. There was a good [...]
Americans have a pretty poor relationship with the idea of telephone customer service. By the time we enter our account information, navigate a phone tree, wait on hold, and are [...]
After a flurry of activity in the early parts of 2011, the balance transfer credit card market has remained stable for over four months. Average 0% APR introductory periods decreased [...]
February 4th, 2010 at 3:07 pm
Thank you so much for putting into words the very thoughts that thousands of us (citi customers, of long standing) have been unable to.
There has to be some justice, especially for those of us that actually CARE about our credit obligations.
Or maybe we shouldn’t care? It sure seems like the deadbeats get all the breaks!
Citibank, please fix this before it’s too late!
February 4th, 2010 at 3:18 pm
You’re welcome Sylvia. I just hope someone that matters cares enough about this to fix this situation.
February 5th, 2010 at 3:24 am
Mr. Weber I applaud you for so eloquently stating the predicament of many. I believe that all who are affected by this should continue to speak out about this matter that indiscrimately punishes everyone, including those who have responsibly paid their Citi Card obligations. Perhaps there should be an advocacy group that could communicate by E Mail to spotlight this matter and work to change it. The true activities of Citigroup in this regard should be continuously brought to the attention of the public so that potential customers are aware of the realities of this credit card practice. An important aspect of this rate increase that has not received much attention is that some Citicard customers never received the alleged notification letter and only became aware upon receipt of the bill. In essence, the failure to notify customers has proved detrimental to card holders because they are denied the opportunity to exercise their options under Federal regulations.
February 5th, 2010 at 9:54 am
Thanks for your kind words, Dorian. As much as I disagree with Citi’s choice to raise rates 29.99%, I would bear no ill will if Citi notified customers via certified mail. This way, they could have made sure everyone impacted was aware. To raise rates to such an astronomical letter without providing more than an easily overlooked notice is a travesty.
February 10th, 2010 at 5:14 am
I too have had my interest rate increased by Citibank to 29.99%. I rarely look at my monthly statement and rely on the online feature to pay, so I was unaware of the increase until it had taken effect. I, of course, called to complain and was told it was to late to ‘opt-out’ and there is nothing I can do about it but to pay it. I have always paid my bill faithfully, no matter if it was financially inconvenient to me. The 10% good customer deduction sounded like a pretty good deal to me until I realized that they were talking 10% off the payment paid not the interest rate. I fully intended to pay my debt in full, but I’m not going to be blackmailed into paying 30% just to pay for their other clients inability to pay their debts. I will be calling consumer credit counseling and may for forced to file a Chapter 13 bankruptcy. Credit can be fixed with time, the interest you pay at 30%, you will never get back. I paid the January 2010 at 30% and will not be paying another one at that rate. I don’t care anymore.
February 10th, 2010 at 10:24 am
Jennifer,
I really hate to hear these stories. What happened to you is truly unfair. While I don’t know particular credit counselors to recommend, http://www.nfcc.org is a website that can help you find a good, non-profit counselor in your area.
February 10th, 2010 at 9:14 pm
Thanks for the info Jeffrey. I have learned a lot from your letter and the comments following. I also have been slapped with a 29.89%. And my account is also in good standing. I like Jennifer cannot make these payments any longer. I have paid Jan and just paid Feb but will NOT pay March. At this APR the debt will NEVER get paid. And I will have paid $6,000 in interest along over a year.
February 11th, 2010 at 11:03 am
Paul,
Based on the amount of interest you are paying, I would strongly consider contacting a credit counseling firm. These companies work with the credit card issuers to get interest rates reduced to reasonable levels. A good resource to find a local non-profit credit counseling (not the type that advertises 50 cent on the dollar settlements) is http://www.nfcc.org. This website will direct you to counselors in your area.
I am really sorry to hear that you got slapped with an uncalled for interest rate increase and hope you can find a credit counselor that will help you get out of this unfair rate trap.
February 12th, 2010 at 7:48 pm
Thank you for the info. I have been conducting some research and will certainly look at the website you recommended. Today I got a call from CapitalOne who reduced my credit limit leaving $361 available. All of this with a 736 Fico score! Thank you for the advice. Paul
February 13th, 2010 at 4:08 pm
No problem Paul. Glad I could be of assistance.
February 15th, 2010 at 3:14 pm
Is it somehow better for them for us to to go through CC, as opposed to paying them off at the ‘lesser rate’ (which was still not that great)???????????
February 15th, 2010 at 3:40 pm
I received my regular monthly email statement notification today. After logging into their website and looking at my statement there is a notice in big font that states my interest rate has been changed to a non-variable rate of 23.99%. I immediately called their customer service department was was told they mailed the change in terms notification on 11/10/09. I told them that if I would have received it I would have called immediately just as I did today with the interest rate changing from 11.24% to 23.99%. They stated the change was due to a cost of doing business increase. They also told me the opt-out deadline was January 31st and the only thing they can do is give me a six month promotional rate of 11.99%. I asked to speak with a supervisor, she wasn’t able to do anything else. I asked to speak to her supervisor. She told me they will call me back within 4-6 business hours, but they will not be able to offer anything different. She explained that if I would have opted out then my account would have been closed. I told her that I would rather have a closed account then pay 23.99%. Unfortunately I have a balance of over $8400 with them and am stuck. I hope this additional follow-up call will allow me to close my account and pay off at the 11.24% rate.
Citibank is the only bank of the credit cards that I have that has done this to me. I called the others to make sure I didn’t have any “missed” notice from them and nothing as of today. This is absolutely ridiculous. I wish I had another card to transfer this balance to, but unfortunately I don’t have that option.
February 15th, 2010 at 6:50 pm
Sylvia, I honestly can figure out why they would do this, other than to make like difficult for people with 29% rates and gain an extra few months at this absurd APR.
February 15th, 2010 at 6:52 pm
Joe, I’m sorry to hear about this and very concerned about the January 31st opt out date. I am afraid there will be a lot more people who have been trapped by this. If you have good credit, you can apply for a new card and do a balance transfer. That may be your best option.
February 16th, 2010 at 9:25 pm
Hi Joe, Sorry to bother again but I have another question. This evening I cx’d my Citimonitor service on my CitiCard. The cs agent was not surprised with my distaste for Citi at this time. However, he mentioned the credit card companies will lower the rates after Feb 22nd…. Is this true? I feel for Sylvia as I’m having the same issue. Sadly I can’t even get approval for a balance transfer – and this is with a 740 Fico.
February 17th, 2010 at 8:22 am
Paul, no bother at all. I wouldn’t take anything a customer service agent tells you as fact. I have heard too many stories involving false promises from customer service agents and plenty that involved outright lying. When the new laws hit, rates can’t go up on existing balances, but credit card companies will likely not be reducing rates out of kindness or some newfound concern for their customers.
February 17th, 2010 at 11:18 am
After years of doing busy and NEVER once being late Citi raised my rates on both of my cards that have a combined balance of 30K. I had taken a significant pay decrease due to economy so I transferred all debt to Citi from other cards. They gave me 2.99% for life of loan and offered to increase my then 20K credit limit to 30K to accomodate me. I have all bills on autopay as I take my credit seriously. Noticed my payment is now 900 per month. So Citi was supposed to help my situation but made it even worse. I did get Discover card to open me for 10K at 0%. This is so not fair it has caused havoc in our life. And all for being a good customer. I called several times very nice even offering to pay them 10K right there for them to reinstate my rate or give me one that I can afford to no avail.
February 17th, 2010 at 11:22 am
THANK YOU JEFFREY FOR THE LETTER TO CITI AND FOR YOUR SUPPORT AND ADVICE. I HOPE THEY LISTEN.
February 17th, 2010 at 3:50 pm
My cb card interest rate was 8.95% this time last year. It was first raised to 11.24% and then 6 months ago was raised to 29.99%. I was told at the time that I was “high risk” even though I’d never been late or missed a payment. I chose NOT to opt-out because it would have killed my credit score as the bulk of my credit was with this citibank card. Today I called and asked if there was any way my rate could be lowered. I was told this was a “business decision” to raise my rate and there were no other rates available at this time. While I understand that citibank will not be able to do this to their new customers, what happens to their old ones? My apr is higher than the cash transaction rate by 10%. It also mentions on my statement that if I’m late my rate will “increase to the penalty 29.99%”. It’s already there! I’m being penalized for nothing.
February 19th, 2010 at 7:13 am
I called yesterday at 8am to see if I could get my interest lowered since I’ve paid down 20% of that card and lowered my overall debt by 35% and increased my credit score. They said no. Ok fine. This morning I received an automated call from Citibank saying that after reviewing my account they are lowering my credit line to 40 dollars more than what’s currently used on the card. The whole reason I didn’t opt out when they raised my rate absurdly was NOT to kill my credit score. So instead they lower the limit as I pay it off? Will this still be possible after 2/22?
February 19th, 2010 at 9:19 am
Nihad,
The new laws won’t stop credit limit decreases, and if accounts are flagged as high risk, many banks will likely continue to reduce available credit once balances are paid down. You may want to look into a new credit card to transfer your balance to before the credit limit decrease has a more negative impact on your credit score. You can learn more about balance transfers by using the left navigation on Smart Balance Transfers
February 25th, 2010 at 1:06 am
Looks like a class-action was requested in a suit filed in Rhode Island. I’m having trouble finding the details. http://newsblog.projo.com/2009/11/citibank-faces-lawsuit-over-cr.html
March 1st, 2010 at 7:46 pm
What I don’t see mentioned anywhere is why the government did not make the changes they instituted regarding these thieves, retroactive. They told the banks they were making new rules and, of course, the banks undermined the changes and the government by raising rates and ripping us off before the changes took effect.
March 1st, 2010 at 7:55 pm
Nehad – That’s why the credit scoring system needs to be changed. I had a number of cards that lowered my available credit so it looked like I was nearly maxed out on all my cards. That will kill anybody’s score.
March 1st, 2010 at 7:58 pm
Mr. Weber – Coming to terms with a credit card company president is like coming to terms with a terrorist. Kind words will not get results. Considering the way they are treating good people, they need to be put out of business with lawsuits and customers dropping them.
March 26th, 2010 at 9:10 am
Great job Mr. Weber! Hopefully they will take notice- I’m in the same boat of folks who threw away the notice last fall thinking it was ‘trash’ so Citi jacked up my interest rate to 29.99%!! I’ve written & called several times & they keep telling me I’ve got the best rate they can offer! At this rate it’s not worth it to me to only have $35 of a $246 payment put on interest. Also, I want to add that my payment for March was 5 MINUTES Late (I paid it onlin) & they charged me $39 late fee!!! How unfair for them to treat customers this way. I will definetely be seeking bankruptcy or something to get out of this.
March 26th, 2010 at 10:37 am
Thanks for the kind words Margie. If you can’t pay down you card right away and you have good credit, you should really look into getting a balance transfer credit card. If you can’t qualify for one, consider contacting a consumer credit agency. Its nearly impossible to get out debt at 29.99% rate.
April 20th, 2010 at 10:16 am
I think we should declare a national bankruptcy day- If everyone declared bankruptcy at once they would have to start listening to us…. It is ridiculous that bank are are getting near 0% from the government and passing along interest rates of 29.99% to consumers. We are mad as hell, and should not take it!
November 12th, 2010 at 9:07 pm
I just came across this website. I see that some of the things that have happened to me over the past year could best be described as robbery. Over the past 25 years, I have paid off four new cars, several student loans and have never missed a credit card payment. (Ever) I have a mortgage and have never missed a payment. (Ever) My FICO score is 720. On every credit card that I have, I pay more than the minimum. I should be completely out of debt in 30 months (sooner if I ever get a raise). So how did the companies thank me ? First, my interest rates went from an average of 8% to over 16% (One card…AT and T Citibank is 22.9% !) Then every other month, Chase reduces my credit every time I pay down my balance. Why would these companies do this ? I am at the point that in 30 months, if I never use another credit card, it will not bother me in the least.Thanks for putting information out about how these companies flex and spin to get around the consumer credit card laws.
November 15th, 2010 at 11:25 am
Thanks for the kind words Deborah. I’m sorry you have gotten caught up in the two main credit card issues of the past two years: interest rate increaes and credit limit cuts. Stay focused on paying off your cards and hopefully it won’t matter what credit card companies do once you are debt free.