Consumer complaint received 2023-11-04
Company: CITIBANK, N.A.
State: VA
Product: Credit card
Sub-product: General-purpose credit card or charge card
Issue: Fees or interest
Sub-issue: Charged too much interest

Complaint:
Citi made an error on my XX/XX/XXXX statement. On XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX I made payments greater than the minimum payment due totaling {$7400.00}. 
Citi mistakenly applied these payments to the balance with the lower APR instead of the balance with the higher APR as required by law under the CREDIT CARD ACCOUNTABILITY RESPONSIBILITY AND DISCLOSURE ACT OF 2009 - TITLE 1 - SEC. 104. APPLICATION OF CARD PAYMENTS.

SEC 104 covers SEC 164 of the Truth In Lending Act ( 15 U.S.C 1666c ).

Sec 164 ( b ) ( 1 ) IN GENERAL.Upon receipt of a payment from a card-holder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted. '' The payment section of Citi 's Credit Card Agreement includes the same language : " If you pay more than the Minimum Payment Due, we'll apply the amount over the Minimum Payment Due first to the highest APR, then to the balance with the next higher APR ... '' Attached is my XXXX and XX/XX/XXXX statements. 

The Interest charge calculation section of the XXXX statement clearly states that the Balance Transfer Rate ( of 0.99 % ) expired on XX/XX/XXXX. It shows that the balance ( BalTrnOffer XXXX ) was {$7100.00}. 

The XXXX statement shows that the new Balance Transfer Rate ( BalTrnOffer XXXX ) APR is 19.24 % and the Flex loan APR is 6.99 %. It shows the payments made on XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX totaling {$7400.00}. These payments were applied to the Flex loan balance at 6.99 % instead of the BalTrnOffer 6 balance at 19.24 %. The payments should have reduced the BalTrnOffer XXXX  balance to XXXX but it instead went to {$7100.00}. 

Note that Citi charged 19.24 % interest on the BalTrnOffer XXXX balance of {$7000.00} through the month of XXXX while during the same period did not apply the payments according to the higher interest rate. 

I called Citi Customer Service about this problem on XX/XX/XXXX after receiving my XX/XX/XXXX statement. The agent said she would have someone look into it and to call back. 

I called Customer Service on XX/XX/XXXX. The agent said that they use the APR from the previous month to determine the payment allocation. Given the results on my XXXX statement it is apparent that the software that creates the monthly statements also uses the XXXX from the previous month to allocated the payments. ( But not to calculate the interest amount that the customer must pay ). 

I sent an demand letter ( attached ) to Citi at XXXX XXXX XXXX XXXX XXXX, SD XXXX on XX/XX/XXXX with the request to have the payment allocation corrected. I have not received a response as of XX/XX/XXXX. 

The practice of using the expired APR from the previous month is not mentioned anywhere Citi 's card agreement. 

Using the expired APR from the previous month is a violation of the law as defined in the Section 164 of the Truth In Lending Act.

I am requesting that Citi correct my statement balance in accordance with the Citi card agreement and federal law.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation