PUBLISHED ONAugust 19, 2015 4:15 AM
NEW YORK - Citigroup Global Markets Inc (CGMI), a unit of Citigroup Inc, has agreed with the New York attorney general to return US$4.5 million (S$6.32 million) in account management fees charged on some 15,000 frozen accounts.
As a result of the agreement, a total of more than US$20 million will be refunded to Citi customers for overcharges in an investigation initiated by New York Attorney General Eric Schneiderman.
In October, CGMI agreed return some $16 million to more than 31,000 customers who paid higher advisory fees than they had negotiated.
The latest overcharges are set to be announced on Wednesday. "We are pleased to work with the New York Attorney General on this matter," a Citigroup spokesman said in an email. "We deeply regret the inconvenience to our clients, who will be reimbursed with interest." Customers did not receive fee rebates they were entitled to when their accounts were frozen, according to the attorney general's office.
Accounts can be frozen for a variety of reasons, the office said, and in some cases, customers should not have been charged fees. CGMI sometimes rebated the fees when requested, an internal review found, and procedures weren't in place to determine when they were appropriate.
As part of the October agreement, CGMI agreed to conduct an internal review of other types of accounts, which is how the bank identified the overcharges related to periods of inactivity.
The New York attorney general began his investigation of CGMI in 2012 after a complaint from a customer in Westchester, New York, who had negotiated a 1.2 percent fee, but was charged 1.5 percent, costing her more than $3,000 over three years.