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.
The suit says:
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.