Citibank will pay more than $4.3 million in refunds to customers after failing to give back outstanding credit card balances and providing misleading statements about unauthorised transactions.
The corporate watchdog says Citibank will refund $3.3 million to 39,500 customers who did not receive refunds when credit card accounts were closed with an outstanding balance.
The error occurred on accounts as far back as 1994, but did not happen every time an account was closed, the Australian Securities and Investments Commission said on Thursday.
Citibank will refunds the credit balance plus interest to customers from Citibank and companies for which it provides credit - including Virgin Money, Bank of Queensland, Suncorp and Card Services branded credit cards.
The lender will also refund $1 million to about 4,000 customers who were misled about their rights over unauthorised transactions made using credit or debit card number details.
ASIC said Citibank incorrectly responded to concerned customers, saying it was not required to assess the claim and that the customer's only option was to approach the merchant or a fair trading agency.
"The letter would likely have misled customers about their protections under the ePayments Code," ASIC said in a statement.
Citibank will refund consumers who may have received a response between January 1, 2009 and July 22, 2016 and who did not have their claim appropriately assessed.
ASIC deputy chair Peter Kell said customers should never be misled about their rights and should feel confident that their bank will appropriately investigate a questioned payment.
"Banks should ensure in all their communications that they are clear and accurate with customers about their consumer rights," Mr Kell said.
