Citizens Financial Group has been directed to pay about $20.5m in penalties and $11m in refunds by federal regulators for failing to credit full deposit amounts to their customers’ accounts.
The order is part of a joint enforcement action taken by the Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance (FDIC), and Office of the Comptroller of the Currency (OCC).
The CFPB in its investigation found that between 2008 and 2013, the US lender violated federal laws by failing to properly credit consumers’ checking and savings accounts.
The probe disclosed that the bank failed to address mistakes when the bank’s scanner misread the deposit slip or the checks, or if the total on the deposit slip did not equal the total of the actual checks. It only addressed mistakes when they were above a certain threshold.
All these discrepancies led to consumers losing millions of dollars over the years.
CFPB director Richard Cordray said: "Citizens Bank regularly denied customers the full credits of their deposits when there were discrepancies between deposit slips and the actual money transferred into the bank. The bank chose to ignore these discrepancies and harmed many consumers by pocketing the difference."
The bank said that said it is coordinating with the regulators to compensate the affected customers soon.
"We are now working with our regulators to make appropriate redress as quickly as possible. As previously disclosed, we have adequate reserves to cover the redress and fines," stated the bank.