Citizens Bank Problems and Solutions
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While Citizens Bank offers easy-to-maintain checking and savings accounts, some customers didn't have the best experience. Here's why.
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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.
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Common Issues with Citizens Bank
Here are some challenges and concerns of Citizens Bank clients (and what you can do about them).
Citizens, formerly known as Citizens Access, is an online-only bank that's a division of Citizens Bank. It features a no-fee, high-yield savings account, and more CD terms.
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.
Citizens Financial Group Inc., popularly branded as Citizens Bank, has over $225 billion in assets.[3] This makes it one of the largest banks in the nation, making it financially stable. It's also an FDIC member, so deposits are insured for up to $250,000 per account holder and ownership category.
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.
Call your bank and inform them of the unauthorized transaction. The bank should refund you the impacted amount once they have validated your complaint. You can also contact the Federal Trade Commission and report the scam.
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.
- Bank of America Advantage Banking:
$300 Bonus Offer - U.S. Bank Smartly® Checking:
Up to $450 Bonus - HSBC Premier:
Earn Up to $2,500 - Chase Total Checking®:
$300 Bonus - First Tech Rewards Checking®:
Up to $300 Bonus - Discover® Cashback Checking:
Up to $30/Month Cashback - Axos Bank:
Rewards Checking - Up to 3.30% APY - Quontic:
High Interest Checking - Up to 1.10% APY - KeyBank:
Key Smart Checking® - $300 Bonus - Upgrade:
OneCard with Rewards Checking - $200 Bonus
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.
Check if you are using the correct password to your online banking account and if you have an internet connection. You can also call Online Banking Customer Service for assistance at 1-800-656-6561.
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.
Citizens Bank: 14-Month CD - 2.75% APY
Citizens Bank: 7-Month CD - 0.03% APY
- Western Alliance Bank:
High-Yield CD Rates - Up to 4.50% APY - SkyOne Federal Credit Union:
12-Month No-Penalty CD - 4.25% APY - CIT Bank Term CDs:
Up to 3.50% APY - American First Credit Union:
12-Month High-Yield CD - 4.00% APY - Technology Credit Union:
5-Month No Penalty CD - 4.00% APY - Freedom Bank:
12-Month No-Penalty CD - 3.75% APY - Blue Federal Credit Union:
15-Month High-Yield CD - 3.55% APY - Quontic:
CD Rates - Up to 4.25% APY - Discover Bank:
1 Year CD - 4.00% APY - Consumers Credit Union:
9-Month Super Jumbo CD - 4.50% APY
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
- ^ Consumer Financial Protection Bureau. CFPB Orders Citizens Bank to Pay $18.5 Million for Failing to Credit Full Deposit Amounts, Retrieved 10/19/2023
- ^ Consumer Financial Protection Bureau. CFPB Action To Require Citizens Bank To Pay $9 Million Penalty for Unlawful Credit Card Servicing, Retrieved 10/19/2023
- ^ Citizens Bank. About Citizens Financial Group, Inc., Retrieved 10/19/2023
- ^ Citizens Bank. Citizens Financial Group Comments on CFPB Settlement, Retrieved 10/19/2023
- ^ CBS News. Citizens Bank customers stunned by overdrawn accounts, missing money due to 'glitch', Retrieved 12/09/2023
- ^ Citizens Bank. Student Checking, Retrieved 10/19/2023
- ^ Citizens Bank. Citizens Checking Accounts, Retrieved 10/19/2023
- ^ Bank of America. Bank of America Announces Sweeping Changes to Overdraft Services in 2022..., Retrieved 10/19/2023
- ^ BECU. BECU Is Reducing Non-Sufficient (NSF) Fees and Overdraft Fees, Retrieved 10/19/2023
- ^ Alliant Credit Union. Alliant's Great News About Overdrafts, Retrieved 10/19/2023
- ^ Citizens Bank. Overdraft Choices, Retrieved 10/19/2023
- ^ Citizens Bank. Citizens Peace of Mind, Retrieved 10/19/2023
- ^ Citizens Bank. FAQs: Overdrafts, Retrieved 10/19/2023
- ^ Citizens Bank. FAQs, Retrieved 10/19/2023
- ^ Citizens Bank. Overdraft Plan Options, Retrieved 10/19/2023
- ^ Citizens Bank. Online CD, Retrieved 12/09/2023
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- The $300 bonus offer is an online only offer and must be opened through the Bank of America promotional page.
- The offer is for new checking customers only.
- Offer expires 01/31/2025.
- To qualify, open a new eligible Bank of America Advantage Banking account through the promotional page and set up and receive Qualifying Direct Deposits* totaling $2,000 or more into that new eligible account within 90 days of account opening. Bank of America Advantage SafeBalance Banking® for Family Banking accounts are not eligible for this offer.
- Once all requirements are met, Bank of America will attempt to pay bonus within 60 days.
- Additional terms and conditions apply. See offer page for more details.
- *A Qualifying Direct Deposit is a direct deposit of regular monthly income – such as your salary, pension or Social Security benefits, which are made by your employer or other payer – using account and routing numbers that you provide to them.
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Penelope Besana is a research analyst at CreditDonkey, a bank comparison and reviews website. Write to Penelope Besana at penelope.besana@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.
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