Who is Citibank?
Citibank is one of the country’s oldest and most powerful financial institutions, with a history that dates back to 1812. And Citibank’s history in the country isn’t a passive one, as it financed war bonds during the War of 1812, provided the Union with $50 million in war bonds during the American Civil War, opened up the first foreign exchange department for any bank, and facilitated America’s acquisition of the Philippines from Spain. Today, Citibank is one of the most prolific credit card providers in the world, and it owns a great deal of consumer debt. And the company hasn’t been shy in pursuing that debt when believed it’s necessary.
Although Citibank hasn’t been mired in one scandal after another like some major banks have, it doesn’t have a perfect record either. In 2015, the Consumer Financial Protection Bureau, or CFPB, assessed a $35 million fine to Citibank, on top of demanding the bank refund $700 million to its customers. This was in response to the bank’s illegal marketing and collection practices. Specifically, Citibank overstated its add-on fraud prevention products, charged customers during their free trial periods, and deceived customers about convenience fees accrued by making payments over the phone.
Citibank has also been accused of robocalling customers about debt collection, which is a violation of the Telephone Consumer Protection Act, or TCPA. This, and Citibank’s deceptive marketing practices suggest that Citibank isn’t one to always play fair with its customers, and those are the customers who are mostly in good standing with the bank.
What should I do if I receive a Citibank lawsuit?
Citibank has demonstrated a willingness to use litigation in recovering debt. Like with most major financial institutions, Citibank will usually wait for a credit card account to go delinquent for six months before claiming the debt unrecoverable. At this point, Citibank will either sell the debt to a debt buyer, send it to a collections firm or recruit a lawyer to being the litigation process. When a customer receives a collections letter from a nearby attorney, that’s a strong sign that a lawsuit is close behind. If that letter comes in, it’s best to get prepared for legal action. That means consulting with a debt defense attorney to properly answer any complaint and begin work on a strong defense. What that defense looks like will depend on how Citibank chooses to go after the debt.
- If Citibank sues through an attorney or one of their collection firms sues – It’s tough for a Citibank customer if they are taking on the bank directly. Citibank does a meticulous job of keeping its records in order, so if the defendant really does owe the debt, Citibank will likely have the records to prove it. Of course, even the most powerful banks make mistakes, and cases of mistaken identity are some of the most common. If Citibank has wrongly assigned the debt, it is still essential that the defendant fight the litigation, as the bank will not let up even if it doesn’t have convincing documentation on its side that it has the right person.If the debt is truly owed and accurately accounted for, there is still an opportunity to get the suit dismissed, or at least settled. Pushing back against the suit, starting with an assertive answer to the original complaint, is often enough to give any collector pause, including those affiliated with Citibank. When a defendant makes it clear that they will contest the litigation, Citibank must determine whether the legal costs are worth the owed debt. This provides a piece of leverage to the defendant and can make settlement opportunities more readily available. With a debt defense attorney providing settlement representation and guidance, it’s likely that the amount owed will be reduced to some extent. In some cases, Citibank may elect not to pursue legal action at all, especially if the debt is not that significant.
- If Citibank sells the account to a debt buyer, and that debt buyer sues – The situation changes dramatically if a debt buyer is involved in the litigation process. When a debt buyer picks up an account, they are required to acquire all information and documentation linked to that account. If they cannot provide this information during a lawsuit, their authority to sue is voided and the case dismissed. This sounds like a rare occurrence, but it’s much more common than one would think.Debt buyers make money by betting on thousands of high risk accounts. In their haste to acquire as much debt as possible, debt buyers often fail to do their due diligence in getting every piece of documentation they need. To an extent, this is part of the debt buyer tactic, as they (rightly) assume that most defendants will not even bother to challenge a lawsuit. In fact, more than 90 percent do not, so even if the debt buyer has no right to sue a Citibank customer, they get away with it the vast majority of the time, as they never have to provide proof of authority.
Debt buyers have also been caught submitting robo-affidavits. An affidavit must be part of the lawsuit, proving that someone with familiarity of the account reviewed its information and confirmed that it is accurate. When a debt collector engages in robo-affidavit practices, they effectively rubber stamp hundreds, even thousands of affidavits at once. It’s a process that courts are starting to reject, so it will likely pass out of use soon.
The way to fight a debt buyer is to make them prove every detail of the account, and don’t be shy with information requests. There’s a good chance that the debt buyer will give up on the lawsuit if it is constantly pressured for clarity.
Any lawsuit is intimidating, but one from a major bank like Citibank can send someone into a panic. Fortunately, there’s no need for dismay, as Citibank, and any debt collector, can be challenged with the help of a reputable debt defense attorney.
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