Credit Claims For Boston Legal And Compliance Professionals: Legal Considerations For Career Advancement – Citizens Bank, one of the nation’s largest regional banks, has agreed to pay a $9 million civil penalty to settle allegations that it violated consumer protection laws while serving some of its credit card customers.

According to the Consumer Financial Protection Bureau, “Citizens Bank failed to properly handle and respond to customer credit card disputes and fraud claims, which filed a lawsuit against the bank in 2020.

Credit Claims For Boston Legal And Compliance Professionals: Legal Considerations For Career Advancement

“Federal law gives credit cardholders important rights when disputing transactions and resolving billing errors,” CFPB Director Rohit Chopra said in announcing the settlement Tuesday.

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“The CFPB will be closely monitoring the conduct of the credit card industry,” he said, adding that US credit card debt is expected to soon reach $1 trillion.

The federal Truth in Lending Act requires credit card issuers such as Citizens Bank to investigate consumer claims, send notices to consumers, and issue refunds for errors or fraud when the claims are valid.

But in a 2020 lawsuit, the CFPB alleged that Citizens Bank failed to “fairly investigate and appropriately resolve” billing errors and customer claims of unauthorized uses of their credit cards during a five-year period ending in 2016. Credit card holders are legally liable for more than $50 when their cards are stolen, lost or used by unauthorized persons.

According to the CFPB press release, Citizens Bank responded to consumer claims “to make consumers jump through unnecessary and burdensome hoops” that were not legally required.

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The CFPB cited Citizens Bank’s requirement that customers file an affidavit known as a “fraud affidavit” when complaining about billing errors or unauthorized use of their credit cards. An affidavit.

Citizens Bank requires those affidavits to be notarized and filed under penalty of perjury, the lawsuit says. The bank also asked customers to “agree to appear as witnesses in court” to attest to the facts set forth in the affidavit, the lawsuit says.

“In several instances, Citizens [Bank] automatically rejected” claims by customers who refused or were unable to complete the affidavit, the lawsuit states.

Under the terms of the settlement, Citizens Bank, which had already stopped using the fraudulent affidavit, agreed not to bring it back into use.

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Citizens Bank said in a statement that the problems cited by the CFPB affected a “very small” number of its 1.2 million credit card customers — about 25,000, or about 2 percent.

Citizens Bank said it “self-identified operational errors” in 2015 and “contacted the CFPB to report issues while initiating voluntary remediation efforts.”

“While Citizens continues to disagree with the CFPB’s position on these long-standing issues, which it self-identified and voluntarily addressed years ago, we are pleased to put this matter behind us,” said Polly Klein, general counsel for Citizens Bank. .

“We pride ourselves on our commitment to transparency, our rigorous compliance programs, and our ongoing efforts to treat our customers fairly and act responsibly,” the statement said.

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In the 12-page settlement agreement, Citizens Bank said it neither admits nor denies the CFPB allegations. The settlement agreement requires the approval of a judge in U.S. District Court in Providence, where the CFPB lawsuit was filed and where Citizens Bank is based.

In addition to the fraudulent affidavit issue, the CFPB lawsuit alleged that Citizens Bank “consistently failed to refund all charges, including finance charges and fees,” when it resolved billing errors and other claims in favor of customers.

“In many cases, Citizens failed to make full refunds by miscalculating the amount of finance charges and fees based on the date the dispute was placed in its system of record, as opposed to when the dispute arose,” the CFPB lawsuit says. .

The CFPB lawsuit accused Citizens Bank of consistently failing to send customers written acknowledgments of their claims of billing errors within 30 days of receipt and failing to notify customers when an investigation determined there was no billing error.

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Finally, the CFPB lawsuits alleged that Citizens Bank failed to provide referrals to credit counseling organizations. The bank “advised customers to call a special toll-free number … but the bank had no policies or procedures to ensure that its employees provided credit counseling information when customers called the designated phone line.”

“They were routed based on the status of their accounts: customers with accounts in good standing were routed to a general customer service department, and customers with delinquent accounts were sent to the collections department,” the lawsuit states.

The $9 million fine, if approved by a judge, will be paid into the CFPB’s victim relief fund.

With more than $220 billion in assets, Citizens Bank operates more than 1,100 branches in Massachusetts, Rhode Island, Connecticut, New Hampshire, Vermont, Delaware, Florida, Maryland, Michigan, New Jersey, New York, Ohio and Pennsylvania. and Virginia, as well as Washington, D.C.

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Consumers can submit complaints about credit card servicing and other financial products and services on the CFPB’s website or at (855) 411-CFPB (2372). There are many misconceptions about accepting credit cards. This is especially true for startups, small businesses, and companies that accept plastic as a payment method.

Credit cards are the most used payment method in the United States, according to a 2020 survey of POS (point-of-sale) transactions.

If you’re on the fence about accepting credit cards because of something you may have heard from an unreliable source, this guide will set the record straight. We’re going to dispel the most common myths about credit card processing.

Any business that accepts credit cards must manage PCI DSS compliance. It stands for “Payment Card Industry Data Security Standard”.

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In short, PCI compliance states that businesses that come into contact with cardholder data are responsible for keeping that data secure. Although PCI compliance is not a local, state or federal law, there are fines and penalties assessed by the merchant’s acquiring bank for non-compliance.

Fortunately, PCI compliance is not difficult to achieve. The best payment processors will handle most of these requirements for you. So look for a processor that handles PCI compliance at no extra cost to you.

Unlike cash, credit card payments don’t immediately put clear funds on your register. So technically, the “immediate” part of this myth contains some truth.

But it’s a misconception that your funds will hang around for weeks and you’ll never get paid—that’s not how it works.

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The actual time it takes to release your funds will depend on many factors. But the biggest impact has to do with the type of processor you’re using. If you use a merchant account provider, your funds will be released faster than if you use a processing aggregator.

Generally speaking, if you use a merchant account provider, you should see the funds posted to your account within one to two business days.

No more counting money, making trips to the bank for deposits, or worrying about keeping money safe. When you factor this into the equation, the extra day it takes to see the funds in your account isn’t that big of a deal.

For each part of the transaction, different entities are involved. Here’s a quick overview of the different players involved in processing credit cards:

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These entities need to be compensated commensurate with their role in the transaction. That’s where credit card processing fees come from.

As a merchant, you pay for a service. So processing credit cards may not be free. That being said, credit card processing doesn’t have to be expensive.

Many traders struggle to understand the fee structure. They don’t realize that some fees are negotiable and don’t have to be paid. So instead of blindly agreeing to your credit card processor’s terms, you should consult with a professional to make sure you’re not being ripped off.

Credit card processors are notorious for adding extra fees to the bill, and merchants don’t think twice about it.

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Here at Merchant Cost Consulting, our team of experts can negotiate with credit card processors to ensure you get the best possible deal. Once you go through the process, you’ll quickly realize that credit card processing isn’t really expensive—it’s just a cost of doing business.

Let’s take a closer look at the average cost of credit card processing for each major card network:

Most of you can expect to pay around 2% of the transaction value depending on how the card was accepted. For example, swipe/dip/tap transactions are cheaper than entering the card number directly into a POS terminal.

If you accept credit card payments in person, you will need to purchase credit card processing equipment. Card readers, POS stations, and credit card processing software will also cost you.

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But in the long run, it’s a low investment considering the convenience you offer your customers. Depending on the size of your operation, these devices can cost anywhere from $100 to $500 to get you up and running.

It only becomes costly when businesses make certain mistakes

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