Jessy Edwards  |  September 26, 2022

Category: Legal News

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Close up of Citibank signage.
(Photo Credit: lentamart/Shutterstock)

Citibank service members class action overview:

  • Who: Four military veterans are suing Citibank. 
  • Why: They say the bank breaches its legal responsibilities to returning service members. 
  • Where: The Citibank class action lawsuit was filed in a North Carolina federal court.

Citibank forces military servicemembers and veterans into debt traps by hitting them with huge interest rate hikes when they return from service, in violation of the law, a new class action lawsuit alleges.

Plaintiffs Pablo Espin, Nicholas Padao, Jeremy Bell, and Keith Taylor filed the class action complaint against Citibank, N.A., Sept. 22 in a North Carolina federal court, alleging violations of the Servicemembers Civil Relief Act (SCRA). 

The SCRA was enacted to address the financial sacrifice servicemembers make by going to war, the class action states. 

It guarantees that all debts incurred by a servicemember before being called to active duty are reduced to a 6% interest rate through active duty, and that financial institutions permanently forgive interest above 6%.

However, Citibank breached these duties to servicemembers and veterans in numerous ways, the lawsuit states.

Citibank hits servicemembers with interest rate penalties, lawsuit alleges

First, Citibank deprives servicemembers of the lower interest rate by denying the lower rate “under the guise of needing additional documentation,” the lawsuit alleges. By the time the servicemembers are on active duty, it’s impractical to overcome the obstacles of seeking extra documentation. 

On top of this, to attract military members, the bank promises a 0% interest rate during active duty and for up to a year after active duty, the lawsuit alleges.

However, while Citibank does provide a reduced interest rate to servicemembers, those benefits are often illusory, the plaintiffs say. 

Rather than permanently forgiving the interest and fees, Citibank retroactively takes back this benefit by imposing an interest rate penalty on servicemembers after they leave active duty and return to civilian life.

“By raising rates on veterans’ outstanding balances – from 0% to as high as 26% – Citibank places our Nation’s heroes into a debt trap,” the lawsuit alleges. 

“These veterans are already subject to intense emotional, familial, and financial stress, and Citibank’s veteran penalty illegally and immorally forces veterans into immediate financial stress.”

The plaintiffs are also suing for breach of contract and violations of the Truth in Lending Act and the Military Lending Act.

They’re seeking certification of the class action lawsuit, damages, fees, costs, an injunction blocking Citibank from continuing the allegedly illegal practices, and a jury trial. 

In February, a group of people accusing Citibank of robocalling them without consent, and who are also not customers of the bank, were granted certification in their class action lawsuit.

In April, Citibank was hit with a class action lawsuit alleging it used an artificial voice recording to unlawfully place pre-recorded non-emergency calls to consumers who were not account holders.

Are you a servicemember who was charged an interest penalty with Citibank? Let us know your experience in the comments! 

The plaintiffs are represented by Matthew D. Ballew and Paul J. Puryear, Jr. of Zaytoun Ballew & Taylor, PLLC and Knoll D. Lowney, Claire Tonry, Marc Zemel, and Alyssa Koepfgen of Smith & Lowney, PLLC.

The Citibank class action lawsuit is Pablo Espin et al., v. Citibank, N.A., Case No. 5:22-cv-00383-FL in the U.S. District Court for the Eastern District of North Carolina. 


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10 thoughts onCitibank class action alleges bank mistreats service members

  1. RICHARD GERVASIO says:

    I opened an account on line. It was opened for about 3 weeks with the minimum in the account that was needed to open. I set up a direct deposit from my employer to post on a friday. That same day the deposit went in I attempted to withdrawl funds. I wqs denied. I was then denied any use of the card all weekend. I was told there was suspicious activity on the account and my account would be under review for 24-48 hours. I was then told that there was nothing i could do with the account until after the review was complete. Again, no explaination on the reason why the account was on hold. The following tuesday after the friday deposit, i spoke to a third agent that said i had all restrictions released and I could use my card. That same afternoon my account was blocked. I then spoke to another supervior who stated that my account was yet again under review for suspicious activity with no explaination. I was put on hold and then after 15min of waiting i was told that my account was in the process of being closed and that any remaining funds in the account would be sent to me via check in the next 30-60 days. WTF!!!!!! I then went to a local branch to speak to a manager so that I could at least attempt to retreive what was mine, I was put on the phone with yet another supervisor, which everyone at citi is a supervior, fraud personel, or security personel, who all does the same thing, which is sit in front of the computer and read verbatum, the ridiuclous protocol on the computer screen. There is nobody in a higher ranking to reach to try and verify an information or someone that can help. They are all useless. I also had a direct deposit that was scheduled which could not be stopped prior to all of this happening, so now I am in the dark about all of my money, both prior to this ridiculous fiasco as well as the money I was paid through the most recent direct deposit. Nobody has answers and they are all robots. I HAVE BEEN COMPLETELY STONEWALLED. IT MY MONEY, THEY BASICALLY HAVE STOLEN MY MONEY AND HELD IT WITHOUT ANY OPPORTUNITY FOR ME TO RECTIFY OR CLOSE THE ACCOUNT MYSELF TO ENSURE I HAVE MY FUNDS AND PART WAYS. THIS IS UNETHICAL AND IN MY OPINION ILLEGAL.

    1. John Kulesza says:

      The same thing happened
      to me is their anybody who can help get my money back

  2. Greg Albertazzi says:

    Citibank bank does not disclose terms and conditions truthfully. They use words that most people would not question. I opened and funded an account. No where, and I read through pages, do they make it clear that once you open your account that you will not be able to log in and use any features until you receive and activate your physical card. They should be legally held accountable for mis leading their clients. Fund your new account and that money is gone until whenever it is you receive your card. Yes, I read the conditions, which state you will not have ACCESS to your account until you receive and activate your card. Fine, because they think most will blame themselves for not reading the “small print” when they call to complain that they have no way of using the money they had just deposited. They purposely mislead customers. Not having access to your account is not the same as, your account and any funds deposited or transferred into your new account will be frozen and held until you receive and activate your card. Better hope its not lost in the mail or not sent at all by mistake. When I asked, well I’d like to close the account and have the funds transferred to the account I provided for the deposit that also had nothing stating, funds deposited will be completely frozen until your physical card is finally received and activated, I was answered with ” you will receive a check in 10 to 14 days from closure” Thats right, BS!!! Didn’t require a check for my first deposit and now transfers, wires, etc are not an option when I need MY money!!! I honestly was hoping I missed something and therefore no fault but my own for literally letting them steal my money. Talked to quite a few representatives and not one could give me a date when I would have my money again, just an estimate of when I should, and I specify SHOULD, receive my card in the mail. Really sorry for those who opened an account and made a large initial deposit because that money is now gone for at least a week at best. I have spoken to my lawyer and suggest to anyone that made a sizeable deposit after completing the account set up and your screen is over taken by the form needed to transfer and deposit funds into your new account. Hey, but to be fair, if you look down at the bottom right, there’s a skip this step option, definitely not noticeable but there in its “fine print” sized font.

    1. Amber says:

      I have this exact problem right now.. And inmade account on 14th (same day this posted) how did you get through

  3. Gary klimesh says:

    Citi bank is doing the same thi g to me. Are there any Attorneys out there that can help me with my case. Citi bank sent out a Big Bank offer through the mail with offer codes, stating that if you opened up a citi bank checking account and deposited $5000 and left it there, in 170 days they would pay you $200… so the 170 days came and went and no $200.. I’m on about 4 days and 40 phone calls to bank personal most of which are in the Phillipines,,,, they 1st said there was no such a offer ever made, and I told them I had the original offer and codes etc. So to stall, they said ok. And deposited the $200,,, only to send a letter later in which they again claimed there was no such program, and took back the $200. And so the scam continues, as then then said if I had and documents of the offer I’d have to Fax them the copies, which cost me $14.56 to do that and when I called them to ask if they received the paper work they said the fax got there but was distorted and they couldn’t read the paper work and wanted me to fax it again. So before long I’ll have more then the $200 spent on fax’s and hrs and hrs of my time and no money from them. And everytime you call them they send you from one person to another and each time you get a new person you have to re-verify your account which takes about 20 minutes with each new person, all designed to drag this on and on and on, till the customer finally gives up. Can someone please help me s I e them. I’M sure they have and are doing this to more then just me.

    1. Lin L says:

      I open an account with citibank per their account promotions and I never received the money. I called and went into the branch. The rep asked that I give him 2 weeks and 6 weeks has passed no return calls and definitely no promotion monies. So sad that this the world we’re living in.

  4. Diane Coon says:

    Citibank promise me no fees and because that I reported them to the FTC now they change their policy to say no fees but they cut my account as soon as they changed their policy so I wouldn’t benefit and this is so disgusting. I want a lawyer on this I was talking to the Kick Law Firm , but they never called me back.

  5. Ella Watson says:

    Received a check for $100 from Door Dash! Happy customer here! Thank you guys!

  6. Heather says:

    Add me

    1. Angela Glenn says:

      I have a credit card that is like 16 years old and they are trying to sue you can’t get blood out of a turnip

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