Q: Citibank will not release my secured credit card deposit. Are their actions legal?
I had a secured credit card with Citibank that I placed a $400 deposit down on. I had the card for about 4 years and made my payments on time. I lost my job & was unable to pay the due balance ($315). Citibank closed my account, sold it to a collection agency and kept the $400 deposit. Now, I have a delinquent account on my credit report. I have attempted many many times to contact Citibank; they refuse to tell me whether or not they have my $400 deposit, claiming they can't access my account because it already went to collections. A supervisor with the collection agency said my file does not contain or show any deposits I made to Citibank and they never received one with my acct. My credit report specifically states it was a Secured Credit card with a $400 credit limit. Citibank sent my acct. to collections while in possession of the full balance due via deposit. They maliciously kept the Deposit and sold the debt on the acct but not the asset. Are these actions by Citibank legal?
A:
I suspect that your $400 deposit was used up and your account became overdrawn by the $315 amount. That should be visible on your monthly statements sent to you before and after that particular time. But that's just a guess, and it would be wrongful of Citibank to fail to provide you with a complete accounting, (unless they already did).
You may dispute the credit report, and see what happens.
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A:
Under California law, the legality of Citibank's actions in retaining your secured credit card deposit while your account was sold to a collections agency depends on the specific terms and conditions of your secured credit card agreement and applicable financial regulations. Generally, secured credit card deposits are meant to serve as collateral for the credit extended. If you fail to make payments, the issuer may have the right to apply the deposit towards the outstanding debt.
However, there should be a clear and transparent process for how your deposit is handled if the account is closed due to non-payment. The bank should provide you with an accounting of how the deposit was applied to any debt owed, and any surplus should be returned to you. The fact that your account was sent to collections without apparent consideration or credit for your deposit raises questions about the process and its fairness.
If you feel your rights have been violated, you may consider reaching out to a consumer rights attorney or contacting the California Attorney General's Office to file a complaint. They can provide guidance based on the specifics of your situation and the applicable laws. Additionally, contacting a non-profit consumer credit counseling service may offer insight into potential resolutions and assistance in navigating this situation.
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