Citibank closed Citi CashReturns card due to "Security Investigation", anyone else?

I wasn't watching the spending on this card closely enough and went over the limit of $34k. I immediately made a payment to pay off this card in full as well as 4k extra, which put it into a credit balance. The next day on 10/15/2009, I could not use the card anymore and calls to Citi was unsuccessful in getting any kind of information out of them. The reps said they would love to reopen the account if it was up to them but something was preventing them from doing so - they all sounded genuinely frustrated by the lack of information regarding the account closure.

I was told that a letter was being sent to me and that was the only way I would be able to find out why my account was closed.

I received the letter today and here's what it says:

Dear MaxRC:

This letter is regarding your Citi CashReturns account.

Your account has been closed to prevent further use. If you or any other authorized user(s) still have a card, please cut it in half and return it to us.

This action has been taken because of a security investigation involving your account.

You will continue to receive a monthly billing statement until your balance is paid in full.

We now consider this investigation closed.

Sincerely,

Security Services Representative

I tried calling Citi again and they said the only thing I could do was to inquire for more information from their legal department through snail mail. I have no desire for doing so - as long as they consider the investigation closed, I don't really care whether I have this card. The only other card I have with Citi is a American Express issued through them. I don't do any AOR's, never done a balance transfer, but does charge quite a bit of business expenses every month. My credit is excellent.

So, has this happened to anyone else?

Hmm call Citi and ask for Security Services Representative?

Stop committing fraud, deadbeat

It happened to me as well as 5 months ago. If you only have your cashreturn closed consider yourself lucky because for me ALL my Citi Cards were closed including one with 20 years of history. No one at citi was willing to talk. Do a search you will find some threads on this. I remember around the same time there was another guy in the forum also got all his cards closed triggered by the closing of cashreturn card.

Sorry to hear, sucked for me too. We should have a thread for how many dollars you lost when Citi closed your CashReturns card under this "we don't want to pay out"-security excuse.

Generally speaking, overpaying the balance by a significant amount can and often does trigger a fraud alert internally at many card issuers. Industry wide, the system noticed people trying to increase (CL+overpayment which exceeds CL) the available credit by doing so. When that did happen, there was a statistical rise in fraud.

The fact you have a track record of the behavior you describe makes me think the investigator went by some general guidelines without reading your file. This happens when they are behind their quota of so many investigations per day.

What I find "very interesting" is how you achieved the overpayment. Citi's website is very strict about not allowing overpayment even to the next dollar as many people prefer to do. (If I owe $99.55, it will not let me pay $100.00.)

I do seem to remember someone posting a comment quite some time back about Citi getting nervous about two payments in the same month triggering a security issue. I found that one kind of interesting. I sometimes pay the minimum payment immediately and the balance prior to the due date (all electronically on the website). My thinking: worse case senario - I'll get nailed with the interest vs late fee and interest=blackmark=interest rate hike.

back to you ... I recommend you pull your credit report very late in December or not much later into the new year. You are looking to see if they placed any more info than "closed by creditor" which could affect your ability to get credit in the future.

JW said:

What I find "very interesting" is how you achieved the overpayment. Citi's website is very strict about not allowing overpayment even to the next dollar as many people prefer to do. (If I owe $99.55, it will not let me pay $100.00.)

I do seem to remember someone posting a comment quite some time back about Citi getting nervous about two payments in the same month triggering a security issue.

Citibank's credit card website allows four payments per pay period (this is up from two which was the limit several years ago). I've done multiple payments on my Citibank AAdvantage credit card more times than I can remember this way. No problems at all. But the website doesn't allow overpaying the card. Most all bankcard website don't allow you to, but if the card also shows where you login to your other bank accounts (checking and savings), most likely you can transfer money exceeding your balance, but I don't suggest it.

Bank's security/fraud departments are difficult to deal with, as they don't even want to talk to you (I had an issue once with US Bank's fraud security department where they wouldn't even give me the time of day). From what you described, something you did jumped at them as looking suspicious (large balance swings/overpaying by a large amounts). I guess you learned a painful lesson here. In these times, it's best to make normal purchases and make payments that don't exceed your balance. If you feel you're near (or about to go over) your limit where you need to do some huge payment to cover some huge up and coming charge, it's probably best to spread that onto another card, so both accounts appear normal.

IMO, Citibank just didn't like people accumulating large rewards/CashBack and decided to close the CashReturns cards both to prevent future rewards activity and to avoid paying accumulated CashBack on the current statement cycle. The CashReturns TOC states that the card can be closed for *appearance* of fraud or abuse, with any accumulated CashBack forfeited. Furthermore, other CashReturns language states that rewards can't be paid on closed cards -- at least if the card is closed by the issuer.

So Citi can decide not only the definition of "abuse", but can also close a card if at any time in the past it was used abusively, even if current usage wouldn't be designated as such. Citibank took a similar approach with their Shell Oil card. (There's another FWF thread about that.) In that case, they said that a change in people's credit reports resulted in their cards being closed, even though people have checked their credit reports and found nothing amiss. As with the CashReturns card, closing of a Shell Oil card by Citi results in forfeiting any accumulated, but not paid rewards.

You can contact the Citibank N.A. President's Office in Sioux Falls, SD about the closure of your CashReturns card, but so far all the "Assistants to the President" have done (or claim to have done) is to submit the issue to Citibank's security and marketing department about re-opening the CashReturns cards, and have received back negative responses. The "Assistants" apparently have no real power, beyond making a recommendation, which can easily be overruled.

When I asked two Assistants if a card closed by this "security investigation" (it's called a "risk closure") had ever been re-opened, the unequivocal answer was: "No." You can try to write to the CEO or President of Citibank Credit Cards, but the letters are just forwarded to that same Presiden't office, and likely read by the same people. There's no guarantee or likelihood that someone with the abiity to re-open your card would read your letter. It's clear that Citi executives have no intent to treat people ethically. When accumulated rewards are forfeited, Citi makes money from the transactions that generated the rewards, with no reduction of the profit from paying the earned rewards.

My and my wife's CashReturns cards were closed in late September. When I first spoke with an account manager and discovered the closures after transactions were declined, I was told that this was the first risk closure she had personally seen, but she said it wouldn't be the last, and basically stated that Citi would do a lot more of them in the near future.

So this was predictable; it just took a while for Citi to come up with selection criteria (which could very well have included spending vs CL, size of rewards payouts in the last year -- I'm told they archive card information after 12 months, etc.). This wouldn't be so bad if Citi waited until the beginning of a new statment cycle to close one's card or paid out accumulated rewards upon closing. After all, an issuer certainly has the right to close one's credit card at any time. But when that closure is coupled with avoiding paying out CashBack or other rewards, then the issuer is crossing an obvious ethical line, whether or not they can legally support their actions.

It's ironic that people who provided the funds for bailing out Citi and other banks are now getting shafted. It's just speculation, but this could also be Citi's response to the Credit Card Act of 2009, trying to mitigate future losses by denying people future rewards and cheating people of their accumulated rewards and CashBack.

Personally, I'm fortunate. We had a good run with our CashReturns cards, even though my wife and I lost a lot of CashBack because of our cards' closures. But it doesn't change Citi's moral culpability for taking these closure actions, nor is our situation representative of others in not-so-great financial circumstances, where the rewards they accumulated would have made a big difference.

Unless Citi can demonstrate that transactions are indeed fraudulent and/or can specifically define what "abuse" means from the outset, the apparently mass closures they made on CashReturns cards appear to be just a way of avoiding their responsibility to cardholders. This lack of responsibility, although resulting in financial gain for them, hardly makes up for past irresponsibilities that resulted in their terrible financial situation. Can anyone say "bad mortgage loan investments and other poor financial choices"?

Edit:
changed: "...Citibank just didn't like people accumulating rewards..."
to: "...Citibank just didn't like people accumulating large rewards/CashBack..."

To answer a couple of questions raised by other posters:

The promo period on the CR card had ended, but when I called to cancel, the retention guy put the card on a 3 month 2% uncapped program, so I thought, what the heck.

I overpaid by submitting payments through my bank's billpay feature, in 20k chunks. I've never had a problem with this method before. Payment hits within 24-48 hours and is immediately available. I've had credit balances much greater than $4k in the past without any issues. Even when the payments trigger some sort of review, all I had to do was call Citi to clear it up.

I don't know how others were using their CR cards, I was charging genuine business expenses from a wide variety of vendors. Now I'll probably go back to my AMEX Blue Cash, which hasn't seen much use in the past year and half. Looks like uncapped 1.5% is the best I can hope for from now on.

Got exactly the same letters as yours today for both myself and my husband.

Our CR cards are idled for sometime though... I believe citi is going through systemic checking of their CC customers using various parameters including the total rewards giving out.

Unfortunately, our credit lines have also vaporized together with the closure of these CR accounts.

MaxRC said:
I don't know how others were using their CR cards, I was charging genuine business expenses from a wide variety of vendors. Now I'll probably go back to my AMEX Blue Cash, which hasn't seen much use in the past year and half. Looks like uncapped 1.5% is the best I can hope for from now on.charging business items to a personal card can be considered abuse, just liek charging personakl items to a business card

Put my CL, date closed, whether or not in rewards period, and CashBack pending in QS.

[eta] someone with better skills, please fix the formatting - thanks.

This sounds fishy with all of the other Citi tidbits and other rumors we've been getting lately. It's nothing you people are doing that's causing this. I just think Citi is in REALLY bad shape and can't cut lines fast enough. I have a few CR cards from the days when they were the belle of the ball with unlimited 5% back. My best month ever I got $6500 back, but I haven't really used them at all since the promo expired. Thanks for the warning that my $110k is probably about to disappear also.

Vanilla10 said: This sounds fishy with all of the other Citi tidbits and other rumors we've been getting lately. It's nothing you people are doing that's causing this. I just think Citi is in REALLY bad shape and can't cut lines fast enough. I have a few CR cards from the days when they were the belle of the ball with unlimited 5% back. My best month ever I got $6500 back, but I haven't really used them at all since the promo expired. Thanks for the warning that my $110k is probably about to disappear also.Actually, I think this is something a little more sinister than cutting lines because they are doing poorly. The method used in these card closings are very different and the accounts are targeted. No reference to bad credit, no reference to these economic times - the tone of the letter is curt and somewhat accusatory, sort of a "you know what you did, we are not going to pursue, but don't bother coming back" kind of letter.

At a purely academic level, I wonder what recourse is available to the people who have lost pending Cash Back. Does lost earned rewards qualify as actual loss? I know for tax purposes, a credit card rebate is not income but a reduction in basis of the purchase - my accountant tells me. If you add together all of sums of lost Cash Back, it could be rather significant. I wonder how enforceable are arbitration clauses in these agreements, and how conscionable are the terms that allow them to close an account and void all Cash Back for "any reason". Again, purely academic wondering.

I have several CR cards and my history seems to match up with that of the people who have faced adverse action on their accounts (charging several times the limit, overpaying the card and having a credit balance, etc.), yet all my accounts are still untouched. The CL of each card individually is less than 25K though, and it sounds like everyone whose accounts have been closed have limits higher than that. Maybe they're using the CL as a starting point for reviewing your accounts.

MaxRC said: I overpaid by submitting payments through my bank's billpay feature, in 20k chunks. I've never had a problem with this method before. Payment hits within 24-48 hours and is immediately available. I've had credit balances much greater than $4k in the past without any issues. Even when the payments trigger some sort of review, all I had to do was call Citi to clear it up.

Your account closure and others had nothing to do with mid cycle payments or credit balances.

SUCKISSTAPLES said: Lets stop tiptoeing around the 500lb gorilla in the room... how many of you people who got their C cards closed were earning thousands of dollars in CC rewards?

Thats who they want to get rid of and they have every right to do so.

You I and everyone else knows you werent making normal personal charges on these cards...you were either charging business purchases, cash equivalents, etc to rack up rewards. They consider that to be abuse.
Of course they have the right to close your credit card for whatever reason. Possibly they also have the legal right to declare anything they want to as abusing the card. But no matter how much anyone earned with the card, the transactions were approved, rewards were earned, and now Citi is closing many of the CR cards, not to just to prevent further abuse, but apparently also to avoid paying out accumulated CashBack.

At least some of the cash equivalent activity you deride was stated on their terms as "personal banking transactions", which went from earning 5% during the promotional period to the standard 1%. Citi was hardly ignorant of this type of activity. In fact, their banking division even encouraged people to open deposit accounts and fund them with a CC, even with the CashReturns card! It's also a fact that Citi tolerated this "cash equivalent" activity for quite a while. As stated previously, they could have taken other steps, such as closing the cards and paying the CashBack accumulated. I think it would have been smarter customer service and publicity-wise for Citi to have taken this approach.

Instead Citi has taken massive AA not just against CashReturns cardholders, but also against Shell Oil cardholders, withholding their rewards as well. Are you going to claim they were all abusing their cards, too? Citi's excuse in that case was a change to people's credit reports, but who knows if that's the real reason. It doesn't seem to be generally true, according to reports. Finally, when the definition of "abuse" seems to include earning high CashBack amounts, and the closures apparently have no chance of appeal, then IMO Citi is acting wrongly, even if it's legal.

I find your lack of sympathy puzzling, whatever the legal situation. Don't forget that Citi made out quite well financially not by just refusing to pay accumulated CashBack, but by the fees from all those abusive transactions. And they've lost a lot of potential business and goodwill by closing those cards. As I said, I had a good run, but Citi's actions deserve criticism despite your comments.

Just trying to end the speculation about the closures being due to overpayments, midcycle payments etc.

In the case of the CR cards (not necessarily the oil cards), the "security threat" seems to be those who were using/"abusing" their CashBack program to the tune of thousands of dollars in rewards.

I dont think the oil cards got a Security closure.

TheManWhoExcaped said: It happened to me as well as 5 months ago. If you only have your cashreturn closed consider yourself lucky because for me ALL my Citi Cards were closed including one with 20 years of history. No one at citi was willing to talk. Do a search you will find some threads on this. I remember around the same time there was another guy in the forum also got all his cards closed triggered by the closing of cashreturn card.That was me Again, same story same letter word for word.

RedCobra said: What I can't understand is why Citi is taking these measures now, long after the 5% CR promotion ended. There are much better rewards cards out there and most of us have switched over and left Citi blood-soaked and in the dust.Because they are big dumb and inefficient...

MikeR397 said: hguy229 said: Has anybody been able to get their account reopened after it was closed due to security risk? I am in a similar situation and may call Citi's executive customer service in NY to get it resolved.Nope, and I've heard that after pressing Citi about this issue, they retalied by closing all the customer's cc's and banking products. Childish Citi, childish.
I contacted Citicard's president's office and requested them to reconsider the closing of my account. The checked with the security/legal department and still kept the account closed. My other credit card and deposit accounts were not affected (as of this moment).