CitiBank Inc. has been ordered to pay hundreds of millions of dollars back to consumers who were ripped off by the bank’s illegal credit card practices, reported Reuters. The settlement is yet another slap on the wrist for Wall Street as no one involved will go to jail.
The Consumer Financial Protection Bureau (CFPB) ordered CitiGroup to repay $700 million to customers that got swindled by the bank’s payment protection, credit score tracking, and credit card add-on scams. According to the CFPB, seven million customers were manipulated by CitiBank’s “deceptive marketing” practices as customers were charged for services they didn’t receive. The bank was also assessed a $35 million civil fine payable to the CFPB and the Office of the Comptroller of the Currency.
Although these types of settlements create some public awareness of Wall Street crime, they do little to curb such behavior. The total settlement payment is a mere 1 percent of CitiBank’s estimated revenue for 2015. Banks barely flinch at such feeble settlement payments because they have money set aside specifically for legal penalties and fines. For them, this is just the price of doing business, or say scamming customers.
This settlement is the tenth of its kind, but Wall Street shows no sign of slowing down. As long as regulators keep hitting Wall Street banks with modest penalties without arresting anyone, the banks will continue to break the law and deceive customers.