New Telegraph

Citigroup claims defective software caused $9m error

Citigroup is working hard to recover funds recently sent in error to creditors of cosmetics company Revlon.

 

Citi already has multiple lawsuits to require creditors to repay the funds in what Citi calls a “clerical error” that resulted in the transfer of $900 million in debt repayment, rather than the interest due on the loans, according to a report in Finextra. In a statement to the media,

 

Citigroup said it had been working on replacing the obsolete software from 1990 when the problem occurred. “We take pride in the role that we play as a global leader in financial services and recognise that an operational error of this nature is unacceptable,” Citigroup said in a statement.

 

“We have put significant, additional controls in place until the new system is operational,” it added. Although Citigroup stated it was an operational error that caused the erroneous transfer, a post on Finextra from “member27”claims otherwise.

 

“Anyone who worked in the SFS and/or TTS operations areas of Citigroup could tell you that this software was in place, (and) was never scheduled for replacement, and is still used.

 

But, the operations areas of Citigroup’s(as well as all other processing banks)are replete with multiple systems such as these … and this is simply the first reported instance of such a problem.”

 

In response to the Finserv post, Patricia Tuma, media spokesperson for Citigroup, said: “While many lenders have recognized the payment was in error and returned several hundred million dollars so far, other lenders have either refused to return or have not committed to return the funds.

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