Federal regulators have ordered Citizens Bank to pay about $34.5 million in fines and refunds for failing to credit the full amount of deposits made, according to a press release issued by the Consumer Financial Protection Bureau (CFPB).
Citizens Bank will pay approximately $11 million to consumers and $3 million to businesses in refunds, and $20.5 million in fines.
The CFPB, together with the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency made the decision against Citizens Bank after uncovering the bank's failure to to credit the full amount of deposits made by consumers, according to the press release.
Citizens Bank pocketed the difference between the receipt and the actual money credited in the consumers' account.
Richard Cordray, director of the CFPB, said in the press release that the bank has chosen to ignore the discrepancies in the deposit receipt and the actual amount credited and "harmed many consumers by pocketing the difference."
"Citizens Bank regularly denied customers the full credits of their deposits when there were discrepancies between deposit slips and the actual money transferred into the bank," he said.
The CFPB's investigation uncovered that the discrepancies occurred from January 1, 2008 up to November 30, 2013, according to the press release.
The bank also failed to take action in verifying if there are discrepancies in the deposits made by consumers and the actual amount credited, thus falsely claiming that they will verify deposits, according to the press release.
Citizens Bank said to the consumers that they will verify deposits. However, it is not part of the bank's practice to verify discrepancies unless they are above the $25 to $50 threshold.
"Fifty dollars may seem like a small amount to a bank with assets worth billions of dollars, but it is real money to regular people," Cordray said in a statement issued separately by the CFPB.
"Consumers deserve to have confidence that they can move their money around securely without exposing themselves to unwelcome risks, such as a bank resolving an error by keeping the difference for itself," he added.
The discrepancies occurred when the bank's scanners misread the number on the deposit slip or when customers made errors in writing down the amount, the press release said.
USA Today added that Citizens Bank is pleased with the settlements.
The bank has already implemented a new teller system in the fourth quarter 2013 to help avoid these kinds of discrepancies again.
