Citigroup Global Markets Inc. (CGMI) will return $16 million in overcharges to more than 31,000 CGMI customers nationwide as part of a settlement reached with New York Attorney General Eric T. Schneiderman announced on Thursday.
Some customers of CGMI, a subsidiary of Citigroup, have already begun receiving refunds, but thousands more are likely unaware of their eligibility for a refund.
“Often, it takes just one tip to uncover an error that affects tens of thousands of individuals,” Schneiderman said. “In this case, a bank customer complained to my office about her account. We investigated that complaint and found a widespread problem, one that cost bank customers, in New York and across the country, millions of dollars. I want to thank Citigroup for its cooperation, and for ensuring that the agreements made with its customers will be honored – to the tune of $16 million.”
Customers with TRAK accounts pay an average fee from 1 to 1.5 percent, but the fees were negotiable and many customers were offered a lower-than-average rate. After an investigation into that process, it was determined that many customers were being charged a higher rate than they had negotiated.
Schneiderman's office is still investigating to determine if more customers were overcharged. With CGMI's cooperation, the attorney general's office is also conducting a wider review of other types of accounts to ensure that all account holders who have been overcharged receive reimbursement.
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