Consumer complaint received 2020-09-30
Company: CITIBANK, N.A.
State: DC
Product: Checking or savings account
Sub-product: Checking account
Issue: Managing an account
Sub-issue: Problem making or receiving payments

Complaint:
I have had a Citibank personal checking account for more than 20 years. On XX/XX/XXXX, Citibank representative XXXX XXXX called me to me inform me that accept direct deposit payments as a sole proprietor is a violation of " banking regulations. '' ( I am an author and had begun accepting direct payments from my literary agency only during the pandemic. ) She informed me that this was only allowed in business accounts by banking regulations.

I left that conversation concerned that I had been violating some regulation for years, and not been informed about it, and hastily got ready to open a business account with Citibank, which, I quickly learned, would charge me a fee. I paused, and contacted my accountant, and then my literary agent, and then two other banks I work with. All informed me that there is no such " banking regulation '' that stipulates that a sole proprietor can not accept direct payments in a personal checking account. 

I contacted Ms. XXXX and informed her of this fact, and asked her to specify the regulation if she thinks I was mistaken. She could not specify the regulation ; she said that she was new to Citibank after 20 years at XXXX and that this was just how the banking regulations had always been. 

I left that conversation, looked into the matter further, and contacted her again, positive that there is no such regulation. In our third conversation, Ms. XXXX said that she had made a mistake in how she put it, but that I simply couldn't do this with a personal checking account. Again I asked her to point to the regulation. She said she'd have to check with the Citi legal team. The following day, she sent me a long document, dated XX/XX/2020, with a half sentence that says personal account holders agree not to use their accounts for " business purposes. '' Again, I've had the account for 20+ years, have talked to representatives at branches about my work numerous times, and never told that accepting payment for contract work or wages was a disallowed " business purpose. '' As we were both in one-party consent states, I recorded my final conversation with Ms. XXXX. She was never able to define " business purposes '' for me. Clearly, she wanted me to open a fee-based account, and continually said that she's just trying to " help me '' comply with " banking regulations. '' No customer should be made by her to feel that they are violating banking regulations. If it's a Citibank policy, I suppose they can make whatever policy they want. But this was framed to me as if I was doing something illegal. 

I'm sure plenty of other customers are bullied into opening fee-based accounts in this manner, and I doubt it is legal for a representative to suggest to a customer that they are violating a law, when no such law exists. I plan to move my business from Citibank anyway, but I don't want future customers to be intimidated in this same manner into paying fees for accounts.

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