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Is Citi Engaging in Criminal Abuses of Active Duty Servicemen on Their Student Loans?

The Obama administration should show big banks that it's not ok harass people serving their country.

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In the highly unlikely event that Citi doesn’t already have Benjamin’s social security number, I’m sure he’d be delighted to provide it to get off their back.

Benjamin has been dealing with Citi via e-mail and phone (and enlisting the help of folks state side) for over two months. This means the odds are good that his student loans is now being charged at its previous interest rate.

While this is clearly only one instance, big banks like Citi are not set up to do anything in a one-off manner. The dunning letter was auto-generated; the bank deemed his active duty to have ended (based on an inability to understand the word “minimum”); it pretends to be unaware of the fail-safe way to verify whether Benjamin is on duty, which is by checking with the active duty database. At Consumerist, one commentor described how Citi also regularly tells grad students who are in school that their loans are in repayment when the bank clearly knows they are in school, forcing them to play a “show me the documents” game. So it is not implausible that they are engaged in the same bad behavior with active duty servicemen, in clear violation of the law.

If so, I hope a class action attorney gets his hands on Citi and makes them pay, big time. It would be better if someone sent the executive who approved this dunning scheme to jail, but since the Obama Administration has decided that big bank employees never commit crimes, we’ll have to hope for costly and embarrassing litigation.


Yves Smith is the founder of Naked Capitalism and the author of "ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism."