Key Takeaways
- Citigroup’s launch of its new premium credit card, the Citi Strata Elite, was troubled by a significant application processing error.
- A special sign-up link, intended only for customers applying in-person at bank branches, was leaked and posted online.
- This link had less stringent screening protocols, leading to a wave of unintended approvals from online applicants.
- In response, Citi was forced to freeze the accounts opened through the leaked link, causing confusion and frustration for new cardholders.
Citigroup’s highly anticipated return to the competitive premium credit card market has hit a major snag. The recent launch of its new Citi Strata Elite card was marred by a critical error that led the bank to freeze numerous newly opened accounts, causing a headache for both the company and its customers.
The Source of the Problem
The issue stemmed from a special promotional effort designed to drive interest in the new $595-a-year card. To attract sign-ups, Citi created a unique application link intended exclusively for customers who applied in person at one of its physical bank branches.
According to people familiar with the situation, this specific application channel featured a less rigorous screening process. The bank reasoned that applicants applying at a branch would likely be existing customers and would be informally vetted by branch staff, justifying the relaxed approval criteria. This in-person verification was a key part of the process.
How a Special Link Caused Widespread Issues
The carefully laid plan went awry when the special sign-up link was leaked and began circulating online. Once public, anyone could use the link to apply for the Strata Elite card, bypassing the standard, more thorough online screening process.
This resulted in a flood of applications from unvetted individuals who were erroneously approved for the premium card. The system, designed for a controlled, in-person environment, was not prepared for wide-scale public access.
Citi’s Response and Customer Impact
Realizing the error, Citigroup took action by freezing the accounts that were opened using the compromised link. This move was necessary to contain the fallout from the errant approvals but left many new cardholders in a state of confusion.
The bank has since apologized for the inconvenience this has caused for verified and legitimate cardholders who were caught up in the mishap. The incident marks a bumpy start for the Citi Strata Elite, a product meant to signal Citi’s renewed fight for affluent customers in the lucrative premium travel card market, competing with rivals like the Chase Sapphire Reserve and The Platinum Card from American Express.
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