Citizens Bank Problems and Solutions

While Citizens Bank offers easy-to-maintain checking and savings accounts, some customers didn't have the best experience. Here's why.

Citizens Bank is one of the largest and oldest banks in the U.S. But it doesn't mean they offer flawless customer experience.

From heavy violations, limited CD offers, and hefty overdraft fees, the cons of this bank are hard to ignore.

Check out the common customer complaints if you plan to open an account with them.

Common Issues with Citizens Bank

Here are some challenges and concerns of Citizens Bank clients (and what you can do about them).

History of Banking Violations

From January 2008 to November 2013, Citizens Bank failed to credit consumers the full amount of their deposited funds.^[1]

After investigation, the bank only fixed errors above a $25 or $50 threshold. This resulted in the "under-crediting" of so many accounts. The Customer Financial Protection Bureau (CFPB) intervened to address the complaints of affected clients.

In addition, CFPB alleged that Citizens Bank violated the Truth in Lending Act when it failed to act on credit card disputes filed by cardholders. Because of this, CFPB filed a formal complaint with the U.S. District Court of Rhode Island in 2020.^[2]

What You Can Do:
If you ever encounter policy violations from Citizens Bank, document the evidence. This could be statements, transaction screenshots, emails, or related communications.

If your complaints are ignored or unresolved, you can escalate them to regulatory agencies like the CFPB.

You can call CFPB at (855) 411-2372 for your complaint. Support is available from 8 AM to 8 PM ET, Monday to Friday. But you can also submit your complaint online.

Technical glitches

In 2015, approximately 2% or roughly 25,000 of Citizens' approximately 1.2 million credit card holders experienced billing errors.^[4]

Then, in 2017, another glitch caused delays in the posting of direct deposits. Citizens Bank attributed the problem to a "vendor processing issue."

Fast forward to Feb 22, 2023, clients discovered their checking accounts were overdrawn, resulting in negative balances.^[5] Citizens Bank explained it was caused by a computer glitch during which debit transactions went through twice.

The bank addressed these issues by refunding fees incurred by the affected accounts.

What You Can Do:
Regularly monitor your account to spot anything unusual with your banking activity.

Banks would do course corrections as soon as they detect any problem on their end. But sometimes, they won't do anything unless you raise the alarm.

No Free Checking Account

The only no-fee checking account option from Citizens Bank is Student Checking.^[6] And you're only eligible for this account if you're a student under 25 years old.

Here's how much the other checking accounts cost:^[7]

• One Deposit Checking: $9.99/mo
  
• Citizens Quest Checking: $25/mo
  
• Citizens EverValue Checking: $5/mo

What You Can Do:
You can waive the monthly fee for each checking account (except for Citizens EverValue Checking).

Here's how:

• One Deposit: Deposit at least once each statement period.
  
• Citizens Quest: Deposit at least $5,000 in total to your primary checking account each statement period or maintain $25,000 in combined monthly deposits and investments.

Overdraft Penalties

There have been several banks that have already reduced their overdraft fees by as much as 71%.^[8][9] Others eliminate these fees altogether.^[10] But Citizens Bank continues to charge $35 per item, which is really pricey.^[11]

It's even more burdensome with the high daily limit of 5 overdraft items, which can cost you up to $175.

What You Can Do:
Citizens Bank provides many ways for you to avoid paying high overdraft fees:

• Fund your account before 10 pm ET on the day you were notified of the overdraft. You'll get refunded for overdraft charges the next day.^[12]
  
• Link your savings account as a buffer for payments.^[13]
  
• Transfer from your linked line of credit.^[14]

Take note that there's a transfer fee of $12 per day when a transfer is made from your line of credit. There's also a $30 annual fee.^[15]

There's no overdraft fee for overdrafts of $5 or less.

Few CD Options

Major banks usually provide multiple CD terms, ranging from 7 days to as long as 7 years. But with Citizens Bank, you can only choose between 10 months and 14 months.^[16]

What You Can Do:
You can compare Citizens Bank's CD rates to those of other banks. The 2 CD terms they offer may still be better options.

Or you may consider a CD ladder strategy. Open one 10-month CD and another for 14 months. This will allow you to access funds periodically while potentially benefiting from higher yields.

Bottom Line

While these problems with Citizens Bank do exist, they don't apply to everyone. So, despite its shortcomings, you may still find good reasons to open an account with them.

You can also stick around if you're an existing customer and have had no issues so far.

If you are planning to open an account, you can read our full Citizens Bank Review to help you decide.

References