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What this article is not about: A letter that pretends to be from Citibank but isn't.

What this article is about: A letter actually from Citibank that pretends to terminate my Citibank account.

I received a notice from Citibank about a change in terms to my Citibank MasterCard credit card agreement. The notice stated that I had the option to reject the change in terms, which I did.

You probably wouldn't be surprised if I reported that my rejection of the new terms caused my card privileges to be terminated. For whatever reason, that's not the case. Here's what the notice says:

If you notify us that you do not accept this change you can continue to use your card(s) under your existing terms until the end of your current membership year or the expiration date on your card(s), whichever is later.
(Item P0904-K 08/20/04)

In my case, that gave me over a year to continue to use the card without having to accept their terms. So I was perplexed to receive this response only about a week later:

Citibank (South Dakota), N.A.
Customer Service Center
P. O. Box 6500
Sioux Falls, SD 57117-6500

Dear Eli Mantel:

Regretfully, we have noted that you decided not to accept the changes to your Card Agreement. We have appreciated serving you, and regret that we will no longer have that opportunity.

Your Citi® Gold Aadvantage®World MasterCard® offers you an array of select services which makes it an excellent value that few other cards can match.

You get unmatched convenience. Your Citi Gold Aadvantage World MasterCard is accepted at more than 16 million locations around the world. You may also have easy access to cash at thousands of ATMs and financial institutions worldwide. To find an ATM near you, simply call our ATM Locator Service at 1-800-248-4286.

Additionally, you have access to the special services created exclusively for our Citi cardmembers such as The Lost Wallet® Service and Citi Photocard.

If you should reconsider, and wish to continue your membership benefits under our new cardmember terms, just sign your name below and return this letter to our Customer Service address listed above.

"By signing below, I agree to accept the terms of the revised Card Agreement."

___________________________________________________            _______________________
Primary's Signature                                              Date



S. Larson
Customer Service

In years past, changes to the terms of credit cards were generally unilateral. In recent years,I've seen credit cards add arbitration provisions which may be opted out of. I suspect that there was a question whether a mandated arbitration agreement was enforceable.

Whatever the reason for allowing customers to opt out of changes, if I have the chance, I want to send a message that creating more onerous provisions in an existing contract is going to lose them customers.

The above letter from Citibank is repugnant to the concept of fair and honest dealing with customers:

  1. By stating: "We have appreciated serving you, and regret that we will no longer have that opportunity", it leaves the customer with the distinct impression that their account privileges have been terminated.
  2. In then uses this erroneous impression to induce the customer to agree to the change.

Misstatement of a material fact in order to induce someone to enter into a contract is fraudulent inducement, which is an affirmative defense against contractual obligations.

Caveat: I am not a lawyer, and I am not your lawyer. You should independently evaluate this information with your own legal counsel before acting based on this information.

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Revision r1.2 - 09 Dec 2004 - 06:57 by EliMantel web search for EliMantel
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