Quick Answer: The Citigroup class action filed by Golomb & Honik, P.C. appears legitimate, alleging the company’s credit protection products are unregistered insurance with deceptive terms and exclusions. The lawsuit claims Citigroup bills ineligible consumers including retirees and unemployed individuals for coverage they cannot use.
A class action lawsuit was recently filed against Citigroup for credit protection coverage sold along with their credit products. The service is also known as credit protect, credit protector, payment protector, PaymentAid, PaymentAidPlus, payment protection, and credit protection.
The suit was filed by Golomb & Honik, P.C., 1515 Market Street, Suite 1100, Philadelphia, PA 19102, (215) 985-9177.
The suit alleges that the Citigroup credit protection products are really insurance and should be registered as an insurance product so it would be subject to insurance regulations, and consumer protection against the deception the suit alleges is created by the product.
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The suit says:
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Despite its simple explanation for marketing purposes, CITI’s Pay Protection plan is a dense maze of limitations, exclusions and restrictions, making it impossible for consumers to determine what Payment Protection covers and whether it is a sound financial choice.
CITI makes no effort to determine whether a cardholder is eligible for Payment Protection benefits at the time of sale. As a consequence, the Company bills thousands of retired persons (many of whom are senior Citizens), along with the unemployed, those employed by family members, and part-time or seasonal Pennsylvania residents, as well as disabled individuals, for Payment Protection coverage, even though their employment or health status prevents them from receiving benefits under the plan.
Further, CITI makes no effort to determine whether subscribers become ineligible for Payment Protection benefits after they are enrolled in the plan. Accordingly, when subscribers’ employment or health statuses change, they will continue to pay for the product even through they may no longer be eligible for benefits under the plan.
CITI requires customers to enroll for Payment Protection coverage before it provides subscribers with the terms and conditions of the plan. – Source
While the suit appears to be targeted towards Pennsylvania residents, it certainly makes some good arguments that would pertain to people all across the country.
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I signed up for a credit protection plan with Citibank around 2004. I had a serious injury and had surgery on my lower back and two months later on my left arm. I filed a claim with the credit protection plan that I had signed up for several years earlier. About four months after I filed my claim they sent me a letter followed with a phone call, telling they needed more information. When I talked with them, the told me I had to list and described in detail both surgeries since they both were from the same injury and was the reason I was off from work. About three months after sending them the information they wanted, I was denied coverage. The reason was because I listed two surgeries on the same form. I tried to explain to them that I did what they wanted. I was just over talked. They referred me back to Citibank’s customer service who told me they couldn’t help me because the credit protection company was contracted out. I was sent back and fourth. Then I started to get endless harassing phone calls at all hours from collection agencies. I have had my credit destroyed, cannot refinance my house and my balance on my credit card has steadily climbed. I sent numerous letters to Citibank’s customer service. They refuse to send me any paperwork concerning my case. I am a retired Peace Officer and Officer from the military. I think I have a good case to sue citibank. I don’t seem to be able to get help from anybody. What can I do? Who can help me?