United States Trustee

CitiBank Admits to Chapter 13 Proof of Claim Robo-Signing

The American Bankruptcy Institute today reported that CitiBank entered a settlement with the United States Trustee over proof of claim practices. Here is an excerpt:

The Department of Justice’s U.S. Trustee Program (USTP) has entered into a national settlement agreement with Citibank N.A. (Citibank), Department Stores National Bank (DSNB) (collectively Citi), and FDS Bank requiring Citi to pay $5 million to remediate robo-signed proofs of claim filed in consumer bankruptcy cases in connection with more than 71,000 Macy’s-branded credit card accounts . . . . Citi acknowledges that its affiliate DSNB issued Macy’s-branded consumer credit card accounts. FDS Bank was responsible for account servicing activities and contracted certain bankruptcy-related services to vendors. Between 2012 and 2015, tens of thousands of proofs of claim . . . were improperly signed, under the penalty of perjury, by employees of a third-party vendor who had not reviewed and/or lacked knowledge of the contents of the proofs of claim. In some cases, the electronic credentials of the vendor’s employees were used to file claims where the employee did not review the claim.

The full settlement is available online.