"Could banks have any less respect for their customers?

Citibank (C) has begun closing customers' accounts without telling them. That's a bitter surprise for some people who pull out their cards to make a purchase, only to learn that the card has been denied.

This isn't anything new, but it's a trend that's starting to involve more banks and affect more customers who least expect it. Pay your bill on time and keep a low balance? Doesn't matter. All types of accounts are getting hit.

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One woman tried to pay for gas, according to the Associated Press. Citibank said it was because of something that appeared on her credit report. But when the woman accessed her credit report, it only said, "Closed at credit grantor's request."


The woman said she used the card regularly and always paid the bill promptly, according to the AP. Other people have reported similar incidents. Read this person's story for more.

And it isn't just Citibank that's yanking cards. The Wall Street Journal has the story of how American Express (AXP) suddenly canceled the card of one woman earlier this year. The woman -- a lawyer, in fact -- was told that her card was canceled because of information in her credit report.

That seems to be a standard line for credit card companies. And though it seems like bad business, experts tell the Journal that it is legal for companies to cancel cards without warning.

Customers have reportedly been affected by this at Bank of America (BAC), JPMorgan Chase (JPM) and HSBC Holdings, according to the Journal.


In Citibank's case, the company said it decided to close some MasterCard accounts that were co-branded with oil companies, including Shell, Citgo, ExxonMobil and Phillips 66-Conoco.

It's fine to close customer accounts. That's business, and banks do it all the time. And in this economy, credit-card companies are getting killed as people who have lost jobs abandon payments. Banks are responding with panic, raising interest rates and fees and canceling cards to try and minimize risk.

What gets me, however, is the way Citibank did it.


AP reports that Citi closed the accounts on Wednesday, but sent out letters Monday informing customers of the change. So Citibank waits until the last minute to tell customers, most of whom probably didn't receive the news before their cards were shut down.

Way to leave your customers in the lurch."