Citibank Credit Protection Plan

Posted on Friday, December 2nd, 2005 at 12:00am CST by f998d697

Company: Citibank Credit Protection Plan

Category: Other

Citibank Credit Protection Plan

December 1, 2005

Dear Sirs,

Please let everyone know - If someone calls during your dinner to sell you a Citibank Credit Protection Plan- JUST HANG UP! It is not the cardholders credit that they are protecting. It is another corporate ploy to exploit those who can least afford it!

In June of 2004, I received just such a call and in a moment of weakness, let them enroll me in a program that I could cancel in 30 days, if I so chose. However, I did not cancel and faithfully paid for the benefit. I was laid off from my job at the end of October, 2004. I was given a fairly generous severance package and was eligible for unemployment. Therefore, I was able to keep up with my payments - and was never late ( and, by the way, was paying more than minimum payment), through September of 2005.

By this time, unemployment was long gone, as was the severance - and I was still not employed. In October, I had to go out of the country on a family issue and came back to serious financial trouble. Included was a now, past due, Citibank credit card payment. Citibank responded by raising my interest rate from 17.9 to 32 %. They also charged me a late fee and an returned check fee as the September payment check bounced - plus charged me an overlimit fee because the previous fee's pushed me over my limit and as "frosting on the cake" they also charged me a foreign exchange transfer fee for charges made while I was out of the country. As I was looking, stunned, at all the fee's, I noticed the fee for the Credit Protection Plan.

Frankly, I had not even considered the plan or the potential benefit until this time. It seemed more useful to keep the account active and useable in case it was need for am emergency. However,since this was no longer an option, I called to activate the benefit on Monday October 31st, 2005. The CSR informed me that I was just under the wire - as they only allowed 365 days to report a job loss to qualify for the benefit. At that point the account was frozen no further charges could be applied - especially the 32% interest fee - which at this point adds about $500 per month. Within a few days, I received paperwork and forms to fill out which I returned promptly. About 2 weeks later, I received a letter from the plan administrators informing me that they were denying the benefit as I had applied too late!

Specifically, when I was laid off, I was to work through the end of October 2004 - however, since the last 2 days of October were Saturday and Sunday, the last day physically worked was Friday, October 29th! Since I had not applied for the benefit until Monday, October 31st, 2005 - I was 2 days late. There was no consideration for the fact that I had been given a 14 week severance package - or that I had collected unemployment through May - or even that I had been called back to my previous employer to complete 2 different short term projects, the last being in June of 2005, much less allowance for a 2 day weekend.

It is interesting to note that in the paperwork sent initially with enrollment - there is nothing about a 365 day window. In fact, it states that only 180 days are allowed to report the job loss. At some point, following June 2004, the window was opened to 365 days! I have no idea if I was ever notified of this change - but given the fact that I receive a minimum of 3 pieces of mail per week from Citibank offering one thing or another, it is possible that I missed that notification.

HOWEVER, it occurs to me that the whole idea of a strict time limit regardless of the status of the beneficiary violates the intention of a Credit Protection Plan. If a person has been steadily unemployed for over a year - they are much more in need of "credit protection" now, then they were at the beginning of their unemployment. Strictly speaking - it is the loss of REGULAR INCOME and not necessarily the loss of a job that creates a need. My loss of regular income occurred when my unemployment ran out in May 2005. It is only because I sold my home to reduce expenses that I was able to continue to pay my bills through September.

In speaking with the plan administrators to resolve my issue, they have qualified me for a one month benefit due to the fact that I moved after I sold my house - they also graciously extended a credit for one month of credit protection fee!

So who really benefits from this plan? In the 15 months since I was enrolled, I have paid nearly $1,000 for this benefit - which incidentally, is charged to my account and that I am now paying 32% interest or the additional amount of $26 per month JUST ON THIS FEE. Plus they are continuing to charge me the monthly plan fee which is now $130 per month. Oh yes, by the way, in the meantime - Citibank is also charging me late fee's.

To add insult to injury, after talking to a manager who insisted there was nothing she could do, I called another department to cancel the plan. Believe it or not, he then tried to sell me a different plan intended for people with higher balances that would only cost $24.95 per month at maximum. To quote " don't you agree that this new plan makes sense because it will save you $100 per month".........I am dumbfounded!!!! How dare they? Never mind the fact that I just told him that I wished to cancel because it was of no benefit to me since my account was closed and overlimit and that additional charges to the account would incur additional over-limit charges; In all the conversations and written correspondence regarding my situation did anyone ever mention there was a less expensive plan? NO, it was only when they were at risk of losing some income did they offer.

This only serves to prove the point I made in my opening statement. It is their own credit that they are out to protect. And now it makes sense to me why they want you to report a job loss within a time frame - the sooner it is reported, the sooner the account is frozen and the less risk they have at taking a loss if an unemployed person has to resort to bankruptcy or other debt consolidation program.

If anything can be done to help - I would appreciate it. However, I would most appreciate the passing of the word so that others are not caught in yet and still, another ploy to commit fraud.


JPlein - California

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1 Comment

436b66de, 2008-10-15, 12:40PM CDT


I too an fighting credit "protectors".

We own a small business - seasonal operation and we (my husband and I) do not draw unemployment as small business owners. I intially took out TWO credit protection plans on our two highest credit limit cards - HSBC and CITI.

Now, for the past 8 months of my life I have been battling BOTH multi-million dollar companies for the use of our "benefits". The benefits were paid for up to date because as You know they charge your card monthly and yes, you do pay interest on those insurance premiums..which I can assure you is NOT legal.

That being said, HSBC has amicably returned my premiums but no interest, no late fees or the over the limit fees that were incurred during their course of the "assessment of my account" LOL EIGHT FRICKIN' months! I want HER job!

In any event, I am fighting and I am not going to STOP fighting until I get back my money!

MAMA always said the squeeky wheel will eventually get the grease...that is the strategy I am using and believe me it is time consuming and my head spins but so far I have gotten back over 3 grand in premiums..I am not stopping there!

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