Citigroup’s Australian unit has refunded about $5m to nearly 230,000 customers for inadequate credit card fee disclosures regarding online purchases of products overseas.
It all started in early 2016 when the bank began charging international transaction fees for Australian dollar transactions made with overseas vendors or where the merchant uses a foreign bank to process transactions. However, the bank failed to properly communicate the policy amendment to customers.
The rule applied to all Citibank-branded and partnered credit cards such as Virgin Money, Bank of Queensland and Suncorp Bank cards.
“This may have led customers to believe that international transaction fees would be charged only when a transaction was made in a foreign currency or with an overseas merchant,” Australia Securities and Investments Commission (ASIC) said.
Customers impacted by the improper fee disclosures have secured fee refunds plus interest. The bank will also refund over $48,000 to 30,174 Virgin Money credit card customers for charging incorrect international transaction fee.
ASIC deputy chairman Peter Kell said: “Financial product issuers must take care to provide clear disclosure to help consumers understand all circumstances where fees will be charged.”