The Fine Print: The Successful Fight Against A Citi Shutdown

The following is not legal advice. Please contact an attorney or Alexander Bachuwa if you have questions or claims regarding consumer arbitration. 

Following one of my Fine Print posts, a Frequent Miler reader messaged me regarding a problem she was having with her Citi accounts. Despite being a Citi customer for years, unexpectedly all of her credit card accounts were instantly shutdown without explanation and millions of ThankYou points were confiscated. What follows is the battle we had against Citi and the final result.

While the details of every case involving account shutdowns are unique, the fact pattern is generally the same.

The Inducement

  • A customer signs up for an award credit card which has a bonus after spending a specified amount.
  • The customer is granted the sign-up bonus.
  • The credit card may have additional perks such as receiving 5X points for purchases at grocery stores or gas stations.
  • The customer takes advantage of this offer.
  • The customer is awarded points for doing so.
  • The annual fee on the card becomes due.
  • The customer calls to cancel the card.
  • The customer is given a retention offer for his or her loyalty whereby the 5X spend promotion is extended.
  • The customer takes advantage of this offer.
  • The customer is awarded points for doing so.
  • The customer periodically redeems points for mortgage payments, flights, and hotels while maintaining a healthy points balance.

The Forfeiture

  • Months, perhaps years later, the customer receives a notice that all of his or her credit card accounts have been shutdown and his or her points have been forfeited.

Futile Attempts at Resolution

  • The customer calls customer service who confirms that the account is indeed closed and refers the customer to a letter that states the same.
  • The customer writes a letter to the corporate office where an ‘investigation’ of what happened takes place.
  • The customer receives the same letter on a different letterhead.
  • The customer files a claim with the feckless Consumer Financial Protection Board.
  • The customer receives the letter again.
  • The customer is left with three options:
    • Give up
    • Small claims
    • Consumer Arbitration

Small Claims vs. Arbitration

The overwhelming majority of contracts governing consumer products and services have a dispute resolution provision that limits a claimant’s remedy to two options: file in small claims court or prosecute the claim through arbitration. A class-action lawsuit is strictly prohibited. The issue with the small claims option is that damages are limited and that some states actually prohibit attorneys in such proceedings. The latter point clearly favors big corporations that have infinite resources and a stable of lawyers.

In this case, my client agreed to pursue the claim in arbitration and hired me to represent her on a contingency fee basis i.e., I would only collect a fee if the client prevailed or if the case settled. Absent this fee arrangement, it would have been cost prohibitive for my client to retain a lawyer to go up against a behemoth like Citi.

Intent to Arbitrate

I filed a claim against Citi with the American Arbitration Association (AAA) seeking two forms of relief: Monetary relief in the amount of $17,000 and non-monetary relief which would be the restoration of my client’s ThankYou points. The monetary claim was based on $.008/point, half of the value of ThankYou points when used by a Citi Prestige cardholder to book American Airlines flights. I did not seek the entire value of the points because my client was more interested in getting her points back than money. The client would appear greedy if she asked for the full monetary value of the points and the actual points. I advised my client that it was a long-shot that Citi would ever give back her points even if she won in arbitration. At the same time, if a points refund was not an option, we could ask the arbitrator for the full value of the points in terms of the monetary award.

First Correspondence with Opposing Counsel

After I filed the claim, I waited for a case manager from the AAA to be assigned to the case. The case manager is in charge of scheduling hearings and serves as a liaison among the attorneys and the arbitrator. That process took more than thirty days to complete. Shortly thereafter, I received an email from Citi’s lawyer. I spoke to the attorney and was informed that my clients’ accounts were closed for consumer abuse in connection with manufactured spending. Citi presented my client with an offer to settle the claim for $3,500 if we agreed to dismiss the arbitration claim.

A Note on Arbitration Costs

Under the consumer arbitration rules, the consumer’s side has to pay $200 to file a claim. The respondent has to pay its portion of the administrative fee which is $1,700 as well as compensation for the arbitrator which starts at $1,500. In addition, the respondent would have to pay outside counsel to represent the company in the matter should it choose not to use its own lawyers. In addition to the outside counsel’s hourly rate or fixed fee, the respondent may also have to pay for air, hotel accommodations, and a per diem if the attorney does not reside in the location where the arbitration is held. As a result of such costs, some companies find it financially prudent to settle claims while others will incur the cost in order to send a message to attorneys and consumers that simply filing an arbitration claim will not result in a cash windfall for the claimant.

The Rejection

This claim had merit. It was not, by any means, frivolous. As a result, we rejected the proposed settlement and began preparing our case.

The Terms and Conditions: Fraud vs. Abuse

Citi’s terms and conditions have evolved over the years, undoubtedly as more customers discover more ways to maximize their points earning potential.

Here are Citi’s terms for ThankYou accounts from October 2016:

Fraud, Misuse, Abuse, or Suspicious Activity. If we see evidence of fraud, misuse, abuse, or suspicious activity, we’ll investigate and, if we determine that fraud, misuse or abuse has occurred, we may take actions against you. These actions may include, without limitation:

  • Taking away the Points you earned because of fraud, misuse or abuse
  • Stopping you from earning Points
  • Suspending or closing your ThankYou Account
  • Taking legal action to recover Rewards redeemed because of such activity and to recover our monetary losses, including litigation costs and damages

Here are Citi’s terms from November 2013 (when my client was using her Citi cards):

ThankYou Rewards may close or freeze your ThankYou Member Account immediately. If you have conducted any fraudulent activity, ThankYou Rewards reserves the right to take any necessary legal action and may have grounds to confiscate any rewards redeemed as a result of such activity.

The language in 2013, the period my client was earning the majority of her points, cites fraud not abuse as a reason for account shutdown. The definition of fraud varies by jurisdiction but, for the sake of simplicity, the dictionary definition is wrongful or criminal deception intended to result in financial or personal gain. In my legal opinion, alleging fraud means alleging criminal activity. Manufactured spending may be frowned upon but it is not against the law. My client admitted that she was buying a significant amount of gift cards to take advantage of the category spends but in no way was she deceiving anyone by doing so.

A Note on Counter-Claims

I advise my clients of the possibility that a counter-claim may be filed against them. For many corporations, a counter-claim is an automatic response, a passive aggressive way to signal to the claimant that the corporation is actually the one in control. Some corporations like eBay include clauses in its arbitration agreement that if a claim is found to be frivolous, the consumer will be responsible for the aforementioned arbitration costs. Some corporations use counter-claims as a tool to induce settlement or surrender. Given the capacity of the opponent, it can be very intimidating for the lawyer and client alike to move forward with a claim when they are suddenly under siege by a foe that is too big to fail.

The Legal Argument

In our estimation, the 2013 terms and conditions governed this claim. Confident that no fraud had been committed, my client was willing to testify that she simply took advantage of the offer that was presented to her and if Citi wanted to place a cap on the offer, it could easily have done so. Furthermore, my client would argue that her past behavior was ratified by Citi when she was given a retention offer which encouraged her to keep spending in the same manner as she had done in the past.

If Citi somehow tried to use the consumer abuse language of 2016, our argument would have remained the same. Citi, equipped with a team of lawyers and a robust marketing department could have used more explicit language to define what is and what is not permissible. If a mom and pop grocery stores has the wherewithal to place a limit of ‘one turkey per household’ during a Thanksgiving Day sale , then surely Citi could have foreseen the consequences of not implementing a cap on its promotion. Not only did Citi fail to mitigate against this possibility, it also encouraged it by blatantly stating that there was not a limit on points that could be earned. Unsurprisingly, throughout this process, Citi would not divulge how much category spending is enough to trigger a shutdown.

Finally, it can be argued that Citi was unjustly enriched. Citi capitalized from the tens of thousands of dollars from my client’s purchases in the form of transaction fees. If Citi truly believed that fraud or abuse had taken place, it should refund the fees to the merchants from where the transactions occurred. It is unseemly that Citi only cried foul when it was time for it to uphold its end of the bargain.

To Settle Or Not To Settle

The problem with having an attorney who is involved in the world of points and a client who is just as obsessed is the lack of perspective. Although I was excited by the prospect of going through the entire arbitration process with Citi, I also had an ethical obligation to inform my client of the risks that she faced. First, there still was the chance of a counter-claim, a remote possibility but one that would weigh heavily on the client if it materialized. Second, the arbitrator, an autonomous decision maker who is not bound by formal laws, could easily decide that my client is greedy and is entitled to nothing. It is not implausible for an arbitrator to rationalize that my client violated the mythical ‘spirit of the rule’ doctrine by exploiting the promotion. While I vehemently disagree with that logic, I recognize that an arbitrator can decide anyway he or she chooses without having to cite reasons for doing so when issuing the award. Finally, if we did prevail, it is very likely that Citi, as is its right, would appeal the award. From there, we would have to start the process anew.

The Counter-Offer

After going back and forth and forth and back, I thought I found a clever way out of this pickle. I called Citi’s attorney and proposed a settlement whereby the client’s ThankYou account would be temporarily restored. Citi would not have to pay more than the original $3,500 settlement amount and would not have to reopen the client’s credit cards. I even said that Citi would only have to put back a percentage of the points. Citi promptly rejected this offer.

The Settlement 

Two weeks before the preliminary conference was set to take place, I countered with a final cash settlement amount that was higher than Citi’s original offer. A few days later, I received an email that Citi had accepted my offer. I found it quite interesting that Citi would rather pay more money than reissue points, something that was valuable to my client but has no inherent monetary value.

Ultimately, my client and I were simultaneously happy and disappointed that this case settled. We were happy because we took on Citi and received a decent settlement amount. We were disappointed because maybe we should have kept on going. Perhaps we could have won. Perhaps our defiance in victory or defeat would have sent a stronger message to Citi.

The Confidentiality Agreement

In most arbitration cases that settle, companies require the client to sign a confidentiality agreement. The companies request that the attorney do so as well. As a matter of principle, I refuse to sign these agreements. Had I done so, the general public would remain in the dark. Claimants would not know that it is possible to go up against corporate giants like Citi. They would have little or no insight regarding the intricacies of the arbitration process.  Most importantly, they would have no idea that real results are possible.

Initially, Citi refused to waive the confidentiality agreement as it pertained to me, something I felt was borderline unethical since the settlement agreement was between the client and Citi. I informed my client of this awkward situation and she told me to remain steadfast in my belief of not signing the confidentiality agreement. In the end, Citi capitulated to my demand so long as I did not disclose the exact amount of the settlement. While I would have liked to boast about how much money we received, it was more important for me to be able to share the details of how my client and I overcame Citi’s questionable behavior. It is my hope that more consumers will come forward and challenge not only Citi but other corporations that have a disproportionate amount of power over its customers.

The Way Forward

Even though a class action is not possible against many corporations, filing numerous, meritorious claims against companies can crack the shield of invincibility as they will be forced to pay more in settlements and awards, more in attorney fees, all the while enduring negative publicity. With each claim that is settled or won, the voice of the consumer will grow louder while the avenues to escape liability will be shutdown, an ironic twist that is long overdue.


About Alex Bachuwa

Alexander Bachuwa is a New York attorney who focuses on consumer protection. He is also a BoardingArea blogger. Contact Alex at through his website at and visit

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76 Comments on "The Fine Print: The Successful Fight Against A Citi Shutdown"

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Thanks Alex for sharing your victory and the associated risks.


Well done Alex. Thanks for letting consumers know they can fight back and win. While I am curious as to the settled amount, all that matters is your client is happy with the outcome. Excellent work.


I’ll make the same comment I did when American Express was shutting down accounts for Blue Cash – it seems so simple to put limits on these 2x or more bonuses of $50k, $100k spend or whatever and then the credit card company would not have these issues, similar to how Chase seems to manage the Ink products. Also the customer would know the limits and complicated terms of what you can buy or not would be unnecessary.

Jake P

Very interesting read. Thanks for sharing


I’m glad that you fought Citi. I wish that the client had agreed to pursue the claim through the entire arbitration process.

I agree that ethics require you to present an informed offer, but I feel that you should have gone after the full value of the points and not settled for a dime less (unless against client’s express consent). You had a very strong case. Even if the 2016 terms had of governed, the language is ambiguous and fails to provide notice. This is the reason why I always reject arbitration agreements, if possible. I want to be in a court.

I would love to take on a few of these cases – even if just at cost once I finish law school / pass the bar. Consumer protection is interesting and a feel good cause to help fellow human beings.


“The issue with the small claims option is that … the plaintiff will not be represented by an attorney.”

This is wrong. Most states, including New York (where Mr. Bachuwa is presumably a licensed attorney), permit counsel representation in small claims court. Only a handful do not allow it, such as California. It’s both surprising and peculiar that Mr. Bachuwa is completely unaware of this.


This is exactly why I vote republican. Schmucks should be slaves to corporations to be used and abused. Not win in arbitration.

Make America great again. Eff Americans!

The time is fast approaching.


Could you share who represented Citi in this matter. If not the firm name, Was it outside counsel from a small or midsize firm or in-house people.

From my corporate law experience these cases are so tough to deal with. You don’t want to set a bad precedent but the cost of fighting them is almost always higher then just settling from the get go.


First of all, it is good to see you wrote about this fight against the “too big to fall” bank. Citi is among the worst in upholding its end of bargain when it comes to this type of situation.

Curiously though, why this has dragged so long since the accounts were closed in Nov 2013 if I did not misread and it took 3 years to settle?

Understand there were many roadblocks including the worthless CFPB complaints that ate up lots of time, but still it seems taking an extraordinary long time.

For much smaller claims (between $2 to 5K) thru the Small Claims Courts in different states that the cases were shared among private discussions, they all were settled the latest a week or so before the initial court mediation appearance. Inevitably it was only a paralegal handled all the back and forth via phone / email.

Citi will send out a 1099 on these settlements. The claimants should make sure the tax portion is included in the settlement amount with a ball park calculation.


So in the end wouldn’t it have been cheaper/more lucrative to go to small claims in California?

You should link to this story:

Man’s $100000 Journey Through Arbitration With Citibank


What exactly was the fraud claim? Manufactured Spending?

Luke Vader

Thanks for posting this (and laying out the legal arbitration process & arguments), Alex. It’s good to know that consumers actually stand a chance when fighting ‘abusive’ behavior by large credit card issuers. Fight the (Citi) power! Citi could have easily stated a cap (as you mentioned) on the manufactured spend, or at least bothered to send a warning letter before arbitrarily closing all her cards and destroying all her points


Alex, i don’t understand why a charge of unfair business practices does not come into play here to A. get past the no class action bs and B. to get punitive treble damages?!?!?!??!??!?!

Citi (and the others) all compensate bloggers/etc wildly to pump their cards. yes, the bloggers are forced to put disclaimers, but it’s an open secret in the industry that the banks DO look at blog content and DO demand changes. Citi compensates many affiliates who produce considerable MS content. To fire clients and steal their points for doing the same thing the Citi-compensated blogger speaks of is… well… an Unfair Business Practice.

Further, these Citi-compensated blogs focus on the very real tangible value of these points- ie: 1st class Intl. Travel. Ergo, the true damages are…. THE TRUE DAMAGES. to call that .08 or event 1.6 is not in line with Citi’s own advertising. I have used points for Intl First Class where i took screenshots of the paid cost for the ticket i flew on with points- it was over $28,000. I can establish that this is how I redeem the points. Thus, the damages are FAR beyond the paltry numbers you negotiated from. These are not hypothetical. Redemptions are not revenue based (except Southwest), so to pretend they are is simply inaccurate.

Comment please…

*note, my sister’s Citi account was shut down for, as near as i can guess, me being an authorized user (i was shut down for mild MS, MS on her account was minuscule and was only open for 5 months). they stole 60,000 TY Points and i am helping her sue them in small claims court for the TRUE value of the points. The above will be the basis for my argument. I plan to ask for, through discovery, their agreements with bloggers and any correspondence related to content with any bloggers advertising their credit cards. i imagine they will find a legal way around providing them- but i’ll try. Bottom line, they are compensating advertisers/bloggers to explain (and promote) the very conduct that they are then calling fraud/abuse. They are deriving financial gain thru transaction fees that are ‘goosed’ by MS, then confiscating the points. Frankly, a good lawyer should be able to eviscerate them…..


Very interesting read. Thanks for posting.

I am trying to gauge the cardholder’s possible level of activity. My math comes out that a fee to Citi from merchants of 2 cents per dollar charged would mean $10,000 of fees would result from $500,000 of sales. So if Citi’s fees from this woman’s MSing were “..tens of thousands of dollars…”, we’re talking seven digits of MS purchases here, right?



dude! nice work brah!

power to the people.


Amen. Citi pulled this one one me too – the shutdown. Almost lost 1.8M TYP. Almost.

Great post. Stick it to man.


I had a small claim case in California. It was against a big corporation. We reached a settlement and the corporation is going to me some money. I was asked to fill out a W-9 form, and I did.
The settlement money is in exchange for a product that I paid for but did not receive, so I had to buy it again from elsewhere, and the amount of settlement is exactly equal to the amount of item I bought plus court filing costs.

At the time, I had no idea that I may be taxed on the amount of settlement. Will I receive a 1099? And if yes, how should I dispute that, given that I had no monetary gain or income from this settlement I just got the money I had paid twice for one product.


[…] The Fine Print: The Successful Fight Against A Citi Shutdown by Frequent Miler. Really interesting read. I’d also be interested to know the costs (if any) when a CFPB complaint is filed against a company. […]


I vote this best post of the year!


An interesting post, not least because it leaves one wondering how much is being talked about here. Did the terms of the settlement permit you to publicly note how close your client came to being made whole?


I still don’t understand why a small claims court filing wouldn’t have achieved a better outcome


Wonderful article. Thank you for sharing!

In California it is illegal to close a consumer’s credit cards without 30 days notice. Is that law useful here? I’ve pointed it out to US Bank several times and have only been condescendingly told “we assure you that all necessary legal requirements were met as it relates to the closure of your accounts.” I am livid and will go to hell and back to get justice.


any way i could get in contact I got shut down in the beginning of this year with a nice amount of points


Alex. You da man. Awesome article.

Thank you for practicing in this area. I am almost certain your office will have phones ringing off the hook.

Maybe even look into Bitcoin bank shutdowns as well. Very similar circumstances. That’s a very hot topic currently and Chase is the leader there.

While we claim banks are greedy and take advantage of their customers, I think we also milk the system. Goes both ways. But I am wondering your opinion on a few things:

1) Almost all promos and 5x anything has caps and people still get shut downdown for abuse. As you mentioned in the article, banks are 300% aware of everything thats going on so why not reduce the exposure to something much smaller? I never understood that. why offer 5x groceries up to 10k spend in 6 months if thats too ridiculous?

2) Every case is different but you were using old terms. what about the various updated terms not just from citi but other banks as well? would these new terms, due to their new awareness, kill us? Also I thought banks can update their terms anytime and we are forced to agree or close the CC? Wondering how you were planning to fight with old terms.

3) I feel like CFPB is being abused so much to the point that its now an ineffective tool with all bark and no teeth or costly damage to banks. They just ignore the CFPB. What do you think?

4) Articles like these just drive home banks are fully aware of our community. Surprisingly they dont write an algorithm to wipe everyone off the face of the earth… so what now? Whats safe? Essentially i am wondering what your opinion is about maximizing MS opportunities because it sounds like it will STILL be allowed up to a tolerable liability whatever that amount is but MUCH lower than what TC allows. Chase INK is a great example.

Thank you Alex!


hm. looks like theres something wrong with the comment area. i can not respond in any length. only short messages?


ok yea. something is up. i am unable to respond. hopefully this will be fixed soon so i can actually say what i want to say.

Greg The Frequent Miler

The issue was that you put a URL in your comment and so it went directly to Spam without Alex (or me) seeing it. I’ve now approved the comment.


Alex you may be aware apparently Citi will forfeit TY points if the TY points sponsor account is closed down – I believe the time frame is 60 days if the TY points are in the original account or 90 if transferred to another account with TY points. I got the 50K checking bonus. Transferred the checking TY points to my Prestige account, then closed the checking account. Around day 60 after the transfer I took a screen shot of the Citi web interface showing my checking TY points would not expire until 2019. However the points were confiscated so there was a contradiction between the T&C and the information provided to the consumer when logged into their TY points account. Perhaps not by accident it appears the feature to see when your points expire is gone from the site. How would you approach this?


Hi Alex great job! very irritating how businesses write everything in their favor. Actually thinking I need to start a business.

Anyway. I’m getting up there in How much I get back in cash using 2% cards. I might be getting to point where I show up on radar. Fidelity and Spark. I sweep the money as soon as possible BUT worried somehow do clawback or come after me…???

any advice thoughts on risk etc? Probably not going to stop me from doing what I do. and I haven’t read cc agreements and won’t til maybe forced to. Or having CC companies read them to me.


I want to addend my earlier comments to underscore that I think Alex is doing top notch work in a largely unexplored area of client representation here.


Hi Alex,

I’d like to talk with you about 2 points/cashback forfeitures I’ve encountered where BB&T and Wells Fargo have both attempted to unjustly enrich themselves at my expense, both occurred in 2015. Wells Fargo after a long dialog has invited me to file arbitration. I will e-mail you with details. Thanks!


[…] The Fine Print: The Successful Fight Against A Citi Shutdown – Fighting Citi to win back points and collect damages for accounts which were shut down without notice. […]


Hi Alex,

Maybe the wrong place, but are you generally allowed to recover non-monetary costs such as time spent? I recently spent a lot of time entering what I viewed as a lucrative sweepstakes and then later found out I was unilaterally disqualified at the company’s discretion. I tried to resolve it with them to explain why they should not have disqualified me, but basically they invoked their right to disqualify and told me to pound sand. I’ve invested considerable amounts of time, and would rather have a fair outcome of just letting my entries stand, but at this point have no recourse working with the company. Can I sue in small claims court for time spent entering the competition and following up with the company at my hourly total compensation rate?



I’ll reiterate what others have said. Greatly applaud taking on Citi over this!

For everyone reading, you want to avoid anything close to this experience obviously, so don’t hoard all of your points in one place where a shutdown like this can be devastating. Have to diversify!


[…] story is a cautionary tale for those that are wronged by big companies and choose to fight back. Although his effort is commendable, his strategy was flawed. Instead of spending tens of thousands […]


[…] claim. My paid advertisement goes as follows: “If eBay has taken away your eBay Bucks, if Citi has taken your ThankYou points, or if a company has taken $1 that rightfully belongs to you, you may have a claim which may result […]


[…] a staunch advocate for consumer arbitration. I have had success going up against the big boys like Citi and Expedia, holding them accountable for mischievous behavior. One of the advantages that […]


[…] settled my first claim against Citi instead of going through the entire arbitration process. This time, we went all the way and […]


[…] The strength of the claim is in a reasonable interpretation of what a “trip” is”. By that standard, the plain, ordinary, and reasonable meaning of the word “trip” refers to the entirety of the travel, not just an individual leg or segment of the journey.  The terms say that the overall trip must be delayed by that period of time. A potential claim seems clear cut–Citi is in the wrong. (see Beating Citi in Arbitration, What It Means for You and The Successful Fight Against A Citi Shutdown) […]