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Photographer: David Paul Morris Photographer: David Paul Morris

Consumers have gotten used to the pitches from their credit-card companies: Sign up and get protection from identity theft and credit problems. They have often ended up saddled with high fees for services they didn’t understand. According to government regulators, many sales tactics were misleading. The Consumer Financial Protection Bureau, which turned four years old on Tuesday, has taken action 10 times against what it calls “illegal credit card practices.”

The latest is a big one. Citigroup has been ordered to pay $70 million in fines and $700 million in relief to customers for the way it ran its credit-card business. Citi and its hired telemarketers used deception to steer customers toward additional fees and services they didn’t need, the CFPB said in a statement issued on Tuesday.

Citi “has taken extensive steps to address each issue that affected customers,” the company said in a statement. It discontinued sales of the add-on products criticized by the CFPB and started refunding customers back in 2013.

About 7 million Citi customers were affected by the illegal sales tactics, the CFPB estimates. The services generally cost from $7 to $13 per month.

Here, according to the bureau, are a few of the tactics Citi used.

"Free" didn’t mean free

Citibank told telemarketers to entice customers with a “free 30-day trial period,” but the bank would sometimes charge during the first 30 days anyway, the CFPB says. Or customers were left with the impression that the “free” service would go away after 30 days if they did nothing. Instead, after a month, they started being charged regular fees.

Taking "yes" for an answer

On the phone with customers, telemarketers would use leading questions to steer customers into signing up for certain products, the CFPB claims. Or they would construe “ambiguous responses” as permission to enroll customers in a service.

Fee for no service

Sometimes customers weren’t eligible for services they signed up for. Credit monitoring services, for example, might not be able to find—or didn’t have authorization to access—a consumer’s information from the credit reporting agencies. Nonetheless, Citi charged those customers, the CFPB says, for services it wasn’t providing.

Pay to pay

When customers with delinquent accounts called Citibank, they would be told of a $14.95 charge to pay their credit-card bill. They were misled, the CFPB says, because the bank didn’t explain that the charge was necessary only if you wanted a payment to post that day. Few needed such speed, especially at that price. “It was rarely in the consumer’s interest to pay the fee,” the CFPB says.

Flipping the script

Telemarketers often knew in advance which of their phone calls would be monitored by a third party. For calls that weren’t being monitored, telemarketers were encouraged to write their own scripts, the CFPB says. As a result, these calls often included “material misrepresentations about product benefits.”

No protection from debt protection

When applying for a credit card through a touchscreen, customers would be steered through a sign-up process that also offered them a “debt protection” service. But, by “using ambiguous text,” it could easily seem like customers were just “acknowledging the receipt of product literature,” the CFPB says. Instead, they were signing up for the additional product and fee.

Abort, abort ...

Customers would often call up Citi to cancel their membership in IdentityMonitor, a fraud and identity theft protection service that generally cost $12.95 a month. Many of them didn’t end up canceling, the CFPB says, after Citi “misrepresented or omitted the costs, terms, or benefits” of the service.