Citibank is facing a class action lawsuit alleging that it charges more for basic checking account fees then advertised, purposely misleading California accountholders in order to maximize the bank’s fee revenue.
Plaintiff Petra Lopez filed the Citibank class action lawsuit in California federal court last month, claiming the bank routinely charges more than the $12 per month represented for basic checking accounts – a practice, she claims, punishes Citibank’s “most economically vulnerable and cash-strapped consumers.”
According to the complaint, Citibank promises accountholders that they will never pay more than $12 per month for basic checking account services, but in reality, the fees can go up as high as $46 a month. This massive price increase occurs when, on accounts like Lopez’s that have insufficient funds at a certain point in the month to pay the monthly checking account fee, Citibank assesses $34 overdraft fees on its own checking account service charges.
These overdraft fees are in essence an additional charge for the monthly checking account services in disguise, since Citibank provides no other service in exchange for the overdraft fee, other than the provision of the checking account services that were marketed at $12 a month, the deceptive checking account fees lawsuit alleges.
The Citibank class action lawsuit goes on to detail Lopez’s experience when she opened a basic checking account at a Citibank branch in California in September 2017. Lopez says she was told that the basic checking account would carry a $12 maximum monthly fee and that in some cases, the account would cost nothing. She was also provided a fee schedule that reiterated in writing what she was told.
Essentially by telling customers about the lowest potential price of a basic checking account but not similarly disclosing the maximum price, Citibank is purposely deceiving customers. Specifically, its low-income consumers are hit especially hard, since higher income accountholders have the means to maintain sufficient balance and avoid fees. Lopez accuses Citibank of exacerbating this dynamic by making low-income people pay even more for monthly checking account fees.
“Besides being deceptive, unfair and unconscionable, these practices breach contract promises made in Citibank’s contracts. These practices also exploit contractual discretion to gouge consumers like Plaintiff,” the Citibank class action lawsuit states.
Lopez contends that she would have never chosen Citibank as her checking account provider had the bank truthfully informed her that her basic checking account services could cost nearly $50 a month. She is seeking to represent a class of all Citibank checking account holders in California who were charged overdraft fees on monthly checking account service fees.
Lopez and the proposed Class are represented by Robert R. Ahdoot, Tina Wolfson, and Theodore W. Maya of Ahdoot & Wolfson PC; and Jeffrey D. Kaliel and Sophia Gold of Kaliel PLLC.
The Citibank Deceptive Checking Account Fees Class Action Lawsuit is Petra Lopez v. Citibank, N.A., Case No. 2:18-at-00146, in the U.S. District Court for the Eastern District of California.