Suit: Citizens Bank broke consumer laws

The Consumer Financial Protection Bureau is suing Citizens Bank, alleging violations of the federal Truth in Lending Act and other consumer protection laws by failing to properly manage and respond to credit card disputes.

The suit accuses the Providence, R.I.-based bank of failing to reasonably investigate and appropriately resolve consumers’ billing error notices and claims of unauthorized use, automatically denying them in certain circumstances.

The bank also failed to fully refund finance charges and fees when consumers asserted meritorious disputes or fraud claims, and failed to send consumers required acknowledgement letters and denial notices in response to billing error notices, the suit claims.

Citizens — the second-largest retail bank in the

Pittsburgh region behind PNC Bank — also failed to provide credit counseling referrals to consumers who called the bank’s toll-free number designated for that purpose, according to the suit.

The bank issued a statement Thursday saying the complaint involved certain billing errors and related issues that impacted a “very small subset” of its credit card customers.

“Citizens will vigorously challenge the CFPB’s action, which is legally unwarranted and includes demands far out of line with actual customer impact,” the statement said.

“Citizens fully addressed these matters within months of self-identifying, self-reporting and voluntarily remediating them more than four years ago,” Citizens’ general counsel, Stephen T. Gannon, said.

The bureau’s complaint, filed in U.S. District Court in Rhode Island, seeks an injunction and civil monetary penalties.