February 23, 2016 / 8:02 PM / 4 years ago

U.S. orders Citibank to pay customers over debt and collections practices

A woman enters a Citibank branch in Buenos Aires, Argentina, February 19, 2016. Citigroup Inc said it plans to exit its retail banking and credit card operations in Brazil, Argentina and Colombia as part of its efforts to cut costs and boost profitability. REUTERS/Marcos Brindicci

WASHINGTON (Reuters) - The Consumer Financial Protection Bureau said on Tuesday it ordered Citibank to pay $5 million (£3.5 million) back to customers and $3 million in penalties over its debt sales and collection practices.

In a statement, the agency said it took action against the financial services company for selling credit card debt with inflated interest rates and for not forwarding consumer payments promptly to debt buyers.

It said it also ordered Citibank, part of Citigroup Inc (C.N), and two law firms it used to comply with a court order to refund $11 million to consumers and forgo collecting about $34 million from about 7,000 consumers.

Reporting by Washington newsroom; Editing by Matthew Lewis

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