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Citibank settlement could help Kentucky consumers

According to regulators, Citibank agreed on July 21 to pay $700 million to customers and another $70 million in fines related to deceptive credit card practices. The Consumer Financial Protection Bureau said that 8.8 million customers were billed for add-on services such as debt protection and credit monitoring. Cardholders in Kentucky and elsewhere were told that these services were free for 30 days or were charged for services that they never received.

Customers who were part of the settlement and still are associated with Citibank will receive a check or a credit statement automatically. Those who are no longer associated with Citi will receive a check if they are entitled to one. Citi said in a statement that these services were discontinued and that they were prepared to reimburse customers.

This is not the first time that the Consumer Financial Protection Bureau has taken action against a large financial institution. Earlier in July 2015, the agency took action against JPMorgan Chase for allegedly selling bad debt. Overall, it has been involved in 10 separate cases since it was created in 2010 as part of the Dodd-Frank Act.

Those who are dealing with high amounts of credit card debt may wish to file for bankruptcy. Bankruptcy may discharge some or all of the debt either through liquidation or reorganization. An attorney might explain why such a decision may be beneficial. In most cases, a judge will issue a stay against creditors that forbids them from contacting a debtor directly about a debt. If a debt is discharged, creditors are no longer able to take action to collect on that debt. Therefore, it may provide debtors with the ability to get a fresh start.

Source: Forbes, "Citi To Pay $700 Million To Consumers Over Illegal Credit Card Practices", Lauren Gensler, July 21, 2015

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