Citibank Extension of Free Checking
It has been advertised by Citibank that consumers who signed up for EZ account will have free checking account as long as they maintain direct deposit and made more than two monthly payments on their bills online. It meant no monthly fees and no fees if they were not able to reach a minimum balance but suddenly there was a change in the agreement. Citibank planned to charge their customers $9.50 a month to maintain their accounts and also charge customers who has account with below $1500 balance plus per check fees. With this issue at hand, New York attorney general Andrew Cuomo said that it is not right for the bank to impose on fees that were not disclosed properly to the customers. It would be unfair for the million who signed up for it knowing that they will not be charged to suddenly see that they owe the bank for the maintenance of their accounts and other fees.
Cuomo emphasized that when you tell customers that your product is free, it should be free. Customers will not be expecting to have fees attached to it and you have to be true to your word. He said that Citibank was not able to inform their customers properly about the changes. It is unfair for the bank to suddenly change the terms. Citibank on the other hand insisted that they did not violate any law. So, to meet halfway, both agreed to extend the original terms of the accounts. As a reasonable term for the customers, they have decided to extend it for another year.
Citibank extended free checking for customers who signed up for the EZ account from January 2009 to November 2009. These customers will not incur monthly fees and will not be charged per check fees and fees charged if they go below the minimum. This will be extended until January 2011.
It is important that even in fine print, lenders and banks should inform the consumers every detail about a product. If the products’ original terms are subject to change and upon the company’s discretion, it should be informed properly to the consumers. Reasons for the changes are to be disclosed as well so customers would know why they need to comply. Consumers on the other hand, should read the terms and conditions so whenever changes come up, so they would understand whether these changes were included in the policy. This way, we can avoid misunderstandings and surprises when changes come to effect.
