Learning Objectives

Welcome to Citi’s Global Consumer Fairness Training! During this training you will get an overview of
our consumer centric Treating Customers Fairly (TCF) program and how it helps Citi manage the
overall conduct risk of the firm.

As a reminder, Conduct Risk is the risk that Citi's employees or agents may – intentionally or through
negligence – harm customers, clients, or the integrity of the markets, and thereby the integrity of
the firm. It will take approximately 25 minutes for you to complete this course.

After completing this training, you should be able to:

 Understand the TCF principles and how to apply them to your everyday activities on behalf
of Citi
 Understand how the TCF program aligns with existing Citi policies, standards and principles
 Understand your responsibilities to ensure consumer fairness and reduce consumer and
conduct risk.

Let’s get started!

Introduction

Treating Customers Fairly is key to “Being the Best” for our customers. At Citi, we strive to treat
customers fairly by acting consistently with Citi’s Mission and Value Proposition, Code of Conduct
and the Consumer Fairness Policy.

The Global Consumer Fairness Policy reflects Citi’s mission to serve as a trusted partner to our
consumers by responsibly providing financial services that enable growth and economic progress. All
Citi staff and third-party providers are expected to adhere to the requirements of the Global
Consumer Fairness Policy and to treat all consumers fairly throughout the products and services
lifecycle, including after the closure of the account.

Our activities are guided by the TCF principles and related customer outcomes. The following
principles are embedded into every facet of our business throughout the lifecycle of Citi’s products
and services:

Works as Described

Appropriate

Value

Ease of Understanding

Works as Described
We are transparent about our products and ensure that they work as described:

 Products and services operate as described to our customers; and

 Requirements for customers who elect to change products, services, submit claims or
register complaints/concerns are clearly explained and reasonable

Example: A bank markets a checking account bonus when customers open a new account and make
three transactions within the first 25 days. The bonus is only issued if the three transactions occur in
the customer's statement cycle, and statements have been cycling as soon as seven days after the
accounts have been opened resulting in the three transactions appearing on two different
statements. Customers are registering complaints because three or more transactions were made
within the first 25 days and the bonus was not received.

• Question: Is this fair to customers? Yes / No

• Answer: This is not fair to customers because the account bonus did not work as described

Appropriate

We provide appropriate products and services that meet consumers’ needs:

 Products and services are designed to meet consumers’ needs and are marketed
accordingly; and
 Products and services information and disclosures provided to consumers are appropriate
(for example, meeting regulatory requirements).

Example: A reward feature for the checking account provides a $100 statement credit when
customers establish a home equity account. A new employee thinks the marketing ad should only be
sent to college students that live in the dormitories across the street from the bank's branch.

• Question: Is this appropriate for customers? Yes / No

• Answer: This would not be appropriate because the reward feature would only be sent to students
that have a low likelihood of owning a home or purchasing one soon.

Value

Our products and services provide consumers with value that is reasonably related to the cost of
products and services:

 Consumers are treated fairly with respect to products and services offered or provided, and
receive value with respect to those products and services

Example: A credit card company sells a credit score monitoring service for an additional monthly
fee. The advertised benefit of the service is that customers will be able to see their monthly credit
score and understand what may be done to increase or decrease a credit score. This benefit is
already automatically provided to all credit card members without cost.

• Question: Is selling this monitoring service fair? Yes / No

• Answer: Selling this monitoring service is unfair because customers that enroll in the service pay an
extra fee and receive no additional value in return.

Ease of Understanding
We clearly and transparently convey the terms and conditions of products and services (particularly
limitations and exclusions) to consumers:

 Products and services information provided to customers is clear and understandable

Remember: Written disclosures may not be sufficient to correct a misleading statement or

representation, especially where consumers are directed away from limitations in the text.

Example: In an effort to reduce paper use, a bank is requiring new checking account disclosures to
be printed with small fonts so all of the disclosures will fit on half the amount of pages. Consumers
are complaining because they are having trouble seeing the costs and fees because of the extremely
small font size and didn’t realize the fee cost 18/month instead of 13/month. This is not fair because
the disclosures are not clear and understandable.

Covered Businesses

The Global Consumer Fairness Policy applies to the products and services lifecycle for non-
investment products and services that impact consumers. This includes deposit, lending, insurance
and additional products and services of the following lines of business:

Global Consumer Banking

 Retail Bank
 Retail Business Banking
 Citi Branded Cards
 Citi Retail Services
 CitiMortgage
 Citi Student Loan
 US Consumer Digital
 International Personal Banking

Citi Private Bank

 Banking, Lending and Residential Real Estate Businesses

The Policy also applies to services performed by Citi’s third-party providers.

Roles and Responsibilities

Now that we have reviewed the businesses covered under the Policy, let’s highlight the key areas
that are responsible for ensuring the principles of the Policy are fulfilled.

All Employees

All of Citi plays a role in ensuring that we treat our customers fairly.

Business Practices (first line)

Business Practices assesses and resolves potential fairness issues that may arise.

Consumer Fairness ICRM (second line)

Consumer Fairness ICRM (CF ICRM) is the policy owner of the Global Consumer Fairness Policy.
Along with creating the templates and tools used in the review of products and services and
marketing campaigns, CF ICRM addresses fairness topics within the scope of the Policy.

Product ICRM (second line)

Product ICRM is responsible for independently reviewing established business controls related to
consumer fairness and referring new or materially altered products or services and marketing
materials for the appropriate reviews.

Legal

Legal is responsible for providing legal advice and interpretation regarding consumer protection
laws, rules and regulations.

Escalation and Raising Concerns

In addition to treating all consumers fairly, Citi’s regulators, Board of Directors, and Senior
Management expect that you identify, manage, and mitigate consumer fairness issues in your day-
to-day activities.

This means that you also have an obligation to escalate any potential consumer fairness issues you
identify or raise a concern where it is not clear if there is a potential fairness issue.

What should you do if you identify a potential fairness concern?

Identify

Sometimes fairness concerns are brought to our attention by consumers through their questions,
complaints or concerns.

Communicate

If you have any fairness-related questions, you should seek guidance from your manager, Business
Practices or a support function, such as ICRM or Legal.

Escalate
Escalate potential consumer fairness concerns immediately. Under Citi’s Escalation Policy:

 The first point of contact for escalating concerns is your direct manager
 If for any reason you are not comfortable escalating to your manager, you may escalate the
concern to another member of management or:
o Human Resources
o Legal
o Independent Compliance Risk Management (ICRM) Officer
o Citi Security and Investigative Services (CSIS)
o Citi Ethics Office
o Business Practices Liaison (in Mexico: the Treating Customers Fairly Team within the
OGC/el equipo de Trato Justo de la OGC)
o Fairness Champion

Take prompt and appropriate corrective action to remediate any potential consumer fairness event
and avoid or mitigate any potential conduct risk.

Knowledge Check

1. The principles in the TCF Policy include: works as described, value, appropriateness, and ease of
understanding. TRUE OR FALSE

TRUE: These principles are crucial to ensuring fairness for our consumers.

2. The TCF Policy is only applicable to Citi employees. TRUE OR FALSE

FALSE: The TCF Policy also applies to activities performed by third-party providers on behalf
of Citi.

3. Once a customer purchases a product, the TCF Policy is no longer applicable. TRUE OR FALSE

FALSE: The TCF Policy applies throughout the product lifecycle.

4. ICRM and Legal are primarily responsible for escalating potential consumer fairness issues. TRUE
OR FALSE

FALSE: All Citi employees are responsible for escalating any potential consumer fairness
issues.

Key Principals and Outcomes

 The product life cycle includes different stages that a product or service goes through from
inception to termination. We should treat our customers fairly throughout the entire product
and service lifecycle.

Many components make up this lifecycle including:

1. Product Development
2. Marketing / Sales (including Incentive Compensation)
3. Underwriting
4. Onboarding / Servicing / Customer Management / Complaints
5. Product or Service Modifications
6. Collections / Loss Mitigation / Foreclosure
7. Fees

Each of these components can be deemed fair if they:

 Work as described
 Are appropriate
 Give value
 Have ease of understanding

Let’s review some examples of the processes Citi implemented to avoid customer fairness issues in
the product and services lifecycle.

Reviews

As part of Citi’s commitment to fair customer treatment, the Marketing Review Standard and the
New Product Review Standard set forth minimum fairness requirements when designing marketing
and product solutions.

The following tools should be used in the review for fairness considerations consistent with these
Standards and include additional information to take into consideration. The link to the Standards
and Tools can be found here: Treating Customers Fairly Standards and Tools.

1. TCF New Product Checklist – for new and materially modified products or services (e.g.,
new functionality added, new channel or target market to an existing product, or changing
the pricing or fee construct requiring substantive changes to consumer facing materials and
disclosures).

2. TCF Marketing Tool – for Marketing materials and disclosures

By providing guidance and tools to help perform these reviews, Citi reinforces the policy of
compliance with the fairness principles, documents the review processes, and generally adheres to
regulatory and other expectations for fair treatment of consumers.

Let’s learn about each checklist.

TCF New Product Checklist

Review of New or Materially Modified Products or Services

Considerations of consumer fairness must be embedded in the design and approval of new or
materially modified products or services.t

The TCF New Product Checklist provides a consistent framework for the inclusion of fairness
considerations and also helps identify potential issues that may have an impact on fairness such as
product design, credit policy, consumer understanding, brand/franchise impacts and value for the
consumer. The TCF Qualifying Questionnaire can be used to determine if a Product Checklist is
required. The TCF New Product Checklist is needed when covered businesses are initiating new, or
materially modified, consumer-oriented products and services.

 Covered Businesses, with support from ICRM, Legal, and Business Practices, or other
applicable teams/functions must complete the TCF New Product Checklist to (1) launch
new products or services; (2) make material modifications to existing products or
services (i.e., new functionalities/capabilities) or (3) add new delivery channels or target
markets.

 The TCF Qualifying Questionnaire can be used to determine if a Product Checklist is

required.

 Additionally, the New Product Review Standards include information that must be
taken into consideration when completing the TCF New Product Checklist.

TCF Marketing Tool

Considerations of consumer fairness must be embedded in processes relating to marketing

campaigns, materials and disclosures.

Fairness considerations are incorporated into Marketing Campaigns and associated Marketing
Collateral targeted to Consumers for products and services.
Examples of considerations for marketing campaigns and collateral include:

 Clarity of the language and presentation used

 Accuracy and completeness of the information, including clarity around fees and conditions

 Substantiation of claims

 Appropriateness of the message and medium for the target audience

 Complexity of the product and ability of consumers in the target market to understand how the
product or service works

 Covered Businesses, with support from ICRM, Legal, and Business Practices are required to
complete the TCF Marketing Tool when they are looking to launch a marketing campaign or
making substantive changes to an existing marketing campaign.

Your business, region or country may have local standards or procedures related to products and
marketing that you need to follow. Please consult with your ICRM contact if you have questions
about which standards are appropriate for your area.

Complaints/Concerns Monitoring

Complaints or concerns are oral or written communications expressing dissatisfaction with a Citi
product, service, policy, employee or even one of Citi’s service providers.

 To continually assess Consumer Fairness, each Covered Business must maintain a

Complaints/Concerns management process that includes receiving and responding to TCF-
related Consumer Complaints/Concerns.

Understanding Fairness Globally

Regulators, legislators, and other policymakers globally have focused on the concept of fairness. The
fairness principles of the Global Consumer Fairness Policy must be considered in all of the
geographies where Citi conducts business. Some countries have emphasized the importance of
treating consumers fairly by law, regulation or government enforcement actions.

Let’s see some examples of how fairness has been enforced or regulated in our world.

Australia

In Australia, the NCCP Act (National Consumer Credit Protection Act) /Corporations Act sets out
expectations for financial institutions. A licensee must do all things necessary to ensure that the
credit activities/financial services authorised by the licence are engaged in efficiently, honestly and
fairly.

The Banking Code of Practice sets the standards for Australia’s banking services and protects
consumers to ensure that they are engaged in a fair, reasonable and ethical manner. The Code also
requires Australian Banks to take extra care of customers who are experiencing Vulnerability and to
show demonstrated Inclusivity and Accessibility for customers who may require extra assistance or
care.

The ASIC (Australian Securities and Investments Commission) Act prohibits against unfair contract
terms. The Act also prohibits, among others, unconscionable conduct, and misleading and deceptive
conduct.

The Banking Royal Commission focused attention on the fairness imperative and the need for
financial service providers to act in accordance with community standards and expectations rather
than focus on compliance with the law and regulation.

Some examples and instances of unfair practices that were identified as part of the Banking Royal
Commission were:
-Unfairly charging fees for services that were not received;
-Unfairly and intentionally delaying the provision of service to increase commission payments; and
-Encouraging consumers to open accounts without the consumer properly considering the
consequences.

Australia – Private Bank

Australia Private Bank products and services are offered through Citibank, N.A. Citibank, N.A. is a
U.S. national bank and its principal U.S. prudential regulators include the Office of the Comptroller of
the Currency (OCC), Board of Governors of the Federal Reserve (FRB), and Federal Deposit Insurance
Corporation (FDIC). Citibank, N.A. is exempted under ASIC Class Order CO 03/1101 and does not hold
an Australian Financial Services License under the Corporations Act 2001.

There are certain conditions that must be met under the Class Order including that CBNA only
services ‘wholesale clients’ and that it provides each of the financial services in Australia in a manner
which complies with the U.S. regulatory requirements that apply to the provision of the financial
services, including any applicable legislation and policies and other documents issued by the OCC,
FRB, or FDIC that apply to the provision of the service.

Where products and services are offered to individuals in Australia they must meet general conduct
rules set out below.
General conduct rules

There are general prohibitions relating to:

 unfair contract terms

 making false or misleading statements

 inducing persons to deal in financial products using false or misleading information

 engaging in dishonest conduct

 engaging in conduct that is misleading or deceptive or likely to mislead or deceive

 engaging in unconscionable conduct

Brazil

In Brazil, the Consumer Protection Code (CPC) applies to financial services as well as other industries,
and guarantees basic customer rights for customer products, including the right to:

 Adequate and clear information about the characteristics, price and risk of customer
products

 Be protected against misleading advertising

 Be served promptly

The CPC is enforced by a government agency known as “Procon” (short for Protection of the
Consumer).

Canada

Federal and provincial human rights legislation set out substantially similar rights and obligations
related to discriminatory practices:

 It is a discriminatory practice to deny, deny access to, or to differentiate adversely in relation

to any individual in respect of the provision of services or facilities customarily available to
the general public on the basis of a prohibited ground of discrimination. The prohibited
grounds of discrimination vary slightly across jurisdictions.

 For example, prohibited grounds under Federal human rights legislation include: race,
national or ethnic origin, colour, religion, age, sex, sexual orientation, gender identity or
expression, marital status, family status, genetic characteristics, disability and conviction for
 an offence for which a pardon has been granted or in respect of which a record suspension
has been ordered.

China

In China, the State Council established the following expectation for financial institutions with
regards to Consumer Rights Protection:

Financial institutions shall under the principles of equality, will, and good faith, fully respect and
consciously protect financial consumers' right of property safety, right of information, right of
choice, right of fair trade, right of claim according to the law, right to education, right to be
respected, and right of information safety, among others, and carry out business activities by
law.

Since 2019, multiple new regulations on financial consumer protection were released by People’s
Bank of China (PBOC) and China Banking Insurance Regulatory Commission (CBIRC), covering new
requirements on governance, complaint handling and marketing management. This reflects that the
regulators further raised the bar for the industry standard around consumer protection.

United Kingdom

In June 2020, it was determined that Lloyds Banking Group failed to provide customers who fell into
financial difficulty with appropriate mortgage repayment options. Lloyds Banking Group was fined
£64 million by the Financial Conduct Authority (FCA) for failing to treat mortgage customers fairly
and provided approximately £300 million in redress.

Hong Kong

Treat Customers Fairly Charter (TCF Charter)

On 28 Oct 2013, the Hong Kong Monetary Authority (HKMA) developed the TCF Charter with the
banking industry as a catalyst for fostering a stronger risk culture towards fair treatment of
customers at all levels of banks and at all stages of their relationship with customers.

The Charter incorporates five high-level principles (TCF principles) and is primarily aimed at retail
consumers.

1. Banking services and products should be designed to meet the needs of customers. Banks
should assess the financial capabilities and needs of customers before offering them a
service, advice or product. The provision of advice or selling of financial products should take
into account the interest of the customers, having regard to their profiles and the complexity
of the banking services or products in question.
 2. Banks should set out and explain clearly the key features, risks and terms of the products,
including any fees, commissions or charges applicable to customers. Appropriate
information should be provided to the customers before, during and after the point of sale.

3. All promotional materials and information designed for customers should be accurate and
understandable. Misleading representations or marketing practices should be avoided.

4. Banks should provide customers with reasonable channels to submit claims, make
complaints, seek redress, and should not impose unreasonable barriers on customers to
switch banks.

5. Banks in Hong Kong that engage in mass retail market should provide reasonable access to
basic banking services to members of the public, paying special attention to the needs of
vulnerable groups. Recognizing that consumers also have their responsibilities, banks should
join forces with government, regulatory bodies and other stakeholders in financial education
to promote financial literacy.

TCF Charter - Examples

On 28 Mar 2014, further to the circular setting out the high-level principles contained in the TCF
Charter, the Hong Kong Monetary Authority (HKMA) set out examples to enhance banks’
understanding of the spirit of the principles.

1. Banks should design services and products that meet the needs of their target customer
segments, rather than designing services and products just to maximize profit.

2. Banks should not lend amounts to customers which are considered to be beyond their
affordability.

3. Banks should have policies and procedures in place to help identify and manage any conflicts
of interest arising between themselves and their customers in the course of their businesses.

4. Banks should highlight to potential customers the key features of a service or product,
including interest rates, fees and charges.

5. Banks should adopt standardized pre-contractual disclosure practices where applicable to

facilitate customers’ comparison of the banking services / products offered by different
banks.

6. Banks should draw customers’ attention to the key risks of products / services.

7. Banks should not engage in misleading or other unfair sales practices such as bait
advertising.

8. Banks should provide customers with clear and understandable information on the
complaints submission procedures.

9. Banks should offer basic banking services (such as HKD deposit and withdrawal services) that
do not impose fees and charges (e.g., low-balance fee and dormant account fee) which
hinder the access of the public (especially vulnerable group customers) to banking services.
 India

The Reserve Bank of India issued the Charter of Customer Rights, which enshrines broad,
overarching principles for protection of bank customers, and which includes five “basic rights” of
bank customers: (i) Right to Fair Treatment, (ii) Right to Transparency, Fair and Honest Dealing, (iii)
Right to Suitability, (iv) Right to Privacy, and (v) Right to Grievance Redress and Compensation.

Indonesia

OJK (Otoritas Jasa Keuangan) regulation No. 1/POJK.07/2013 regards Consumer Protection in
Financial Service Sector among others and includes the requirement to:

1. Provide and deliver information regarding products and services which are accurate, honest,
clear and not misleading,

2. Consider the appropriateness of the Consumer’s need and capability to the products and
services offered, and

3. Protect consumer data confidentiality.

Malaysia

The Fair Treatment of Financial Consumers policy document (FTFC), issued by the Central Bank (Bank
Negara Malaysia), sets out the expectations for financial service providers (FSPs) to effectively
manage conduct risk to provide financial consumers with the confidence that FSPs act fairly in
dealings with financial consumers. In doing so, the FTFC sets out principles for FSPs to adhere to,
including:

 Fair treatment of financial consumers should be embedded in corporate culture and values

 Financial consumers are provided with fair terms in contracts

 Clear, relevant and timely information of financial services and products is provided to
financial consumers

 Staff, representatives and agents exercise due care, skill and diligence when dealing with
financial consumers

 Reasonable care to ensure suitability of advice and recommendations provided to financial

consumers

 Complaints and claims by financial consumers must be handled promptly, fairly and
effectively
 Mexico

In Mexico the regulatory agency that supervises the adherence to Customer Fairness regulations is
the National Banking Protection Agency (CONDUSEF . Comisión Nacional para la Protección de la
Defensa de los Usuarios de Servicios Financieros) entity under the Minister of Finance. This agency
was established in 1999, and derived from the issuance of the Federal Protection and Financial
Services Users´ Defense Law (Ley de Protección y Defensa al Usuario de Servicios Financieros).

The “Law of Protection and Defense of the Financial Services Consumer” (Ley de Protección y
Defensa al Usuario de Servicios Financieros) has the objective to rule the protection and defense of
rights and interests for financial services users. This law also rules the organization, procedures and
operations of a commission to protect consumers and ensure compliance with the law.

Chapter VII of General Transparency Provisions Applicable for Credit Institutions and Financial
Societies of Multiple Objective (Disposiciones de Carácter General en material de Transparencia
aplicables a las Instituciones de Crédito y Sociedades Financieras de Objeto Múltiple).

These provisions are derived from “Law for Transparency and Ordering of Financial Services” (Ley
para la Transparencia y Ordenamiento de los Servicios Financieros) and are aimed at regulating,
among others, the activities which are considered as a way from sound practices and the usage
related to the offering and commercialization of products and services provided by Financial
Institutions.

Chapter II of General Transparency Provisions for Sound Practices, Transparency and Advertising
Applicable for Insurance Institutions (Disposiciones de Carácter General en material de Sanas
Prácticas, Transparencia y Publicidad aplicables a las Instituciones de Seguros)

These provisions derived from “Law of Insurance and Bonds Institutions” (Ley de Instituciones de
Seguros y de Fianzas) and are focused on defining the activities which are deemed away from sound
practices and the usage related to the offering and commercialization of products and services
provided by insurance institutions as well as transparency and publicity of them. 

Other financial-related regulations also reinforce obligations to financial entities toward the
protection of financial services users, ensuring products and services are offered in a transparent
way and provided in accordance to its offer, setting up the legal framework for customers´
protection.

Singapore

In Singapore, Fair Dealing Guidelines (No. FAA-G11) established expectations for financial
institutions. They include, among others, that:
  Fair dealing is a central concept in corporate culture

 Financial institutions offer products and services that are suitable for the target audience

 Customers receive clear, relevant, and timely information

The Monetary Authority of Singapore (MAS) also mandates that each financial institution file a
report on misconduct identified for an individual licensed representative.

On 22 May 2019, the MAS and Association of Banks in Singapore (ABS) announced the establishment
of the Culture and Conduct Steering Group (CCSG). The CCSG aims to promote sound culture and
raise conduct standards among banks in Singapore.  

Taiwan

1. The “Treating Customers Fairly Principles” was enacted by the Financial Supervisory Commission
(FSC) on December 31, 2015, which includes nine principles and five implementations as a reference
for financial service industries to promote and implement protection of financial consumers.

The nine principles refer to the: (1) principle of fair and good faith upon entering into agreements,
(2) principle of due care and fiduciary duty, (3) principle of true advertisement and solicitation, (4)
principle of suitability of products or services, (5) principle of informing and disclosing, (6) principle
for sale of complex and high risk products, (7) principle of balance between remuneration and
performance, (8) principle of complaints protection and (9) principle of the professionality of
business personnel.

The five implementations refer to: (1) establish a business culture which emphasizes on protection
of financial consumers; (2) adopt the principle of treating customers fairly, (3) adopt “the principle of
treating customers fairly” strategy with BOD meeting approval, (4) execute “the principle of treating
customers fairly” into all business practice, and (5) incorporate “the principle of treating customers
fairly” into the internal control system and audit system.

Please refer to the link for more details : http://law.fsc.gov.tw/law/NewsContent.aspx?id=5972

2. Assessment Program Launched to Evaluate the Implementation of the Treating Customers Fairly
Principles by Financial Service Enterprises (FSC letter No. 1070119566)

To encourage financial services enterprises to value the Treating Customers Fairly (TCF) Principles
and to help enterprises get a better picture of how they are doing in implementing the Principles,
the FSC launched the Financial Service Enterprises Treating Customers Fairly Principles Assessment
Program in 2019.

The assessment program includes assessing the enterprises “implementation of the nine TCF
Principles and whether the enterprises'' boards of directors value the principles and take specific
actions accordingly. The FSC expects that the assessment program will promote a deep-rooted
business culture of treating customers fairly, and will encourage financial institutions to value the
TCF Principles and ensure the equitable, reasonable, and fair treatment of customers during all
stages of their transactions, so that the protections of financial consumers can be further fulfilled
and enhanced.

United States of America

In the U.S., the Dodd-Frank Act prohibits unfair, deceptive, or abusive acts or practices (UDAAP) in
connection with financial products and services. The Consumer Financial Protection Bureau (CFPB)
supervises and enforces compliance with UDAAP rules. The key U.S. prudential regulators, including
the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve
(FRB), and Federal Deposit Insurance Corporation (FDIC), are also keenly attuned to fairness issues,
particularly those that may indicate safety and soundness or other weaknesses in banks. Depending
on the asset size of the bank, these prudential regulators also supervise and have enforcement
authority for the Unfair or Deceptive Acts or Practices (UDAP) provisions in section 5 of the Federal
Trade Commission Act or for the UDAAP provisions of the Dodd–Frank Act.

Measures that should be taken to prevent UDAAP include:

 Verify that information provided to consumers is clear, complete and accurate.

 Avoid the use of claims such as “guaranteed,” “pre-approved,” and “lifetime rates,” unless
these claims are true. For example, a lifetime rate cannot change during the customer’s
lifetime and controls would be needed to prevent the rate from changing.

 Provide a clear, up-front disclosure of any contract provision that permits a change in the
terms.

 Avoid engaging in promotions of a product or service that highlight a particular benefit, if

that benefit will be negated by another aspect of the transaction.

 Review telemarketing scripts to ensure that they fairly and adequately describe the terms,
benefits, and material limitations of the product or service being offered.

 Clearly notify consumers in connection with “free trial periods” if the consumer will be
required to affirmatively act to cancel the service at the end of the trial period to avoid being
billed for service. Get clear and affirmative consent to terms and billing arrangements.

 Perform appropriate due diligence in selecting a third party supplier in accordance with
Citi’s Third Party Management Policy and Standard

The below terms explain the different acts and practices which could be considered unfair,
deceptive or abusive under Dodd Frank.

Unfair
 Unfair acts or practices (i) cause, or are likely to cause, substantial injury to consumers; (ii) the
injury is not reasonably avoidable by consumers; and (iii) the injury is not outweighed by
countervailing benefits to consumers or competition.

Deceptive

Representations, omissions, acts or practices are deceptive when they (i) mislead or are likely to
mislead the consumer; (ii) the consumer’s interpretation is reasonable under the circumstances;
and (iii) the misleading act is material to the consumer.

Abusive

Abusive acts or practices (i) materially interfere with the ability of a consumer to understand a
term or condition of a product or service; or (ii) take unreasonable advantage of a consumer’s:
(a) lack of understanding of material risks, costs, or conditions of a product or service,
(b) inability to protect their interests in selecting or using the product or service, or
(c) reasonable reliance on the provider to act in the interests of the consumer.

What happens when proper measures are not taken to prevent unfair, deceptive, or abusive acts
and practices?

Easy Military Travel Hid Credit Costs and USA Service Finance,
LLC - Overcharged Servicemembers for Add-on Product

Easy Military Travel offered financing for airline tickets to military servicemembers and their families
and USA Service Finance, LLC (USASF), serviced the loans made by Easy Military Travel. The CFPB
found in November 2019 that Easy Military Travel:

 Charged a fee to consumers who obtained financing through Easy Military Travel but failed
to include that fee in the finance charge or the annual percentage rate for consumers who
obtained financing, even though it was a cost of credit

 Failed to provide consumers required information about the terms of credit, such as the
amount financed, the total costs of purchasing airline tickets through financing, and the total
of financing payments

 Quoted falsely low monthly interest rates over the telephone to consumers

The CFPB found that USASF, which serviced travel loans made by Easy Military Travel:

 Overcharged servicemembers and their families for a debt-cancellation product for loans
that were sold by Easy Military Travel but purchased and serviced by USASF

 Failed to establish, review, or update any written policies or procedures regarding the
accuracy and integrity of the consumer information it furnished to consumer reporting
agencies
USAA Federal Savings Bank Failed to Stop Payments or Resolve Errors

USAA Federal Savings Bank is a federally chartered savings association. In January 2019, the CFPB
found that USAA:

 Failed to properly honor consumers’ stop payment requests on preauthorized electronic

fund transfers

 Failed to initiate and complete reasonable error resolution investigations

 Reopened deposit accounts consumers had previously closed without seeking prior
authorization or providing adequate notice.

Summary 1
As you can see there are a variety of policies and principles globally that discuss Fairness. But the
context of TCF principles remain the same for all.

Principles:

 Work as described
 Are appropriate
 Give value
 Have ease of understanding

Please make sure you understand the overall concepts as well as any specific ones that impact your
region.

Summary 2
By utilizing the TCF principles in your everyday activities to ensure sound review, management, and
design of products and services, you help reduce potential consumer risk as well as conduct risk
from the firm. We all have a responsibility to treat customers fairly, uphold the principles and
policies set forth by Citi, and speak up when necessary.

Knowledge Check

1. Regulators, legislators, and other policymakers globally have focused on the concept of fairness.
TRUE or FALSE

TRUE: Some countries have emphasized the importance of treating consumers fairly by law,
regulation or government enforcement actions.

2. Unfair, deceptive, and abusive acts and practices are only applicable to credit products. TRUE or
FALSE
 FALSE: Unfair, deceptive, and abusive acts and practices are prohibited throughout the
lifecycle of all consumer financial products and services.

3. Actual consumer harm is required to cause an unfair practice. TRUE or FALSE

FALSE: If the practice is likely to cause harm to a consumer, it may be considered unfair.

4. If you identify that an employee potentially or actually engages in an unfair, deceptive, or

abusive act or practice your only responsibility is to not get involved. TRUE or FALSE

FALSE: If you identify a potential unfair, deceptive, or abusive practice it is your

responsibility to escalate it accordance with Citi’s escalation policies.

Do these scenarios create a fairness issue?

5. “Sometimes my monthly mortgage payment is deducted from my account on the first of the
month, but other times, it is deducted on the fifth of the month.”

FAIR or UNFAIR

UNFAIR: The consumer cannot anticipate when his account will have a deduction.

6. “I went in to the branch to apply for a credit card. I’m not always perfect in paying my bills
exactly on the due date, so the branch employee offered a Citi card that doesn’t charge late
fees.”

FAIR or UNFAIR

FAIR: The bank provides products and services that are appropriate for consumers and
consumers can rely on the bank to show them products that match their needs.
7. “I know that to avoid a monthly fee on my checking account, all I have to do is have direct
deposit and make one bill-payment through online banking each month – things that I would do
anyway.”

FAIR or UNFAIR

FAIR: The consumer clearly understands the terms and conditions of the products or
services (particularly any limitations or exclusions).

8. The TCF Program support Citi policies, standards and principles as part of an overall Conduct Risk
strategy.
 TRUE or FALSE
TRUE

Conclusion
This training provides some TCF principles to be considered where Citi conducts business. If you have
specific questions relating to your local regulations, please contact your Business Practices Team /
Business Practices Liaison or Treating Customers Fairly Team (in Mexico: the Treating Customers
Fairly Team within the OGC/el equipo de Trato Justo de la OGC).

In addition, where local laws or regulations potentially conflict with the Global Consumer Fairness
Policy, Covered Businesses must consult with Consumer Fairness, ICRM, or Legal for guidance.

Thank you for completing the Treating Customers Fairly Training