Corp-Ethics.com - Report: Citibank overcharged customers in Japan

Company	CitiGroup [Company Info]
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Date	Issue	Title
10th May 2006	Other Issue	Citibank overcharged customers in Japan

Report

A computer glitch at Citibank branches in Japan has caused 274,800 incorrect transactions over the past week, the latest Japanese problem at the firm.

As a result of the error, some account holders had transactions wrongly recorded twice, while others took place but then did not appear on statements.

Citibank said the computer problem had now been fixed.

Citibank and its parent Citigroup have both come under fire from Japanese financial regulators in recent months.

Citibank said on Wednesday that the computer problems from 2 May to 8 May were caused by errors in a new computer system that occurred despite testing.

"Citibank Japan deeply regrets that this incident has occurred," it said in a statement.

"The bank is taking the necessary measures to prevent further occurrence."

A spokesman added that the bank could not say how much money was involved in the 274,800 incorrect transactions.

Last month, Japan's Financial Services Agency accused Citigroup's Japanese trust banking unit of misleading inspectors, and ordered it to halt all new operations from 2 May.

Citigroup has also been forced to close its private banking service for wealthy customers after it was found to have misled account holders about the financial risks, and failed to safeguard against money laundering.

It also recently acknowledged that its Japanese management had "failed to establish a culture that ensured ongoing compliance with laws and regulations".

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