Warning with Citi Accounts opened for miles

Discussion in 'General Discussion | Miles/Points' started by cheryld, Mar 3, 2011.  |  Print Topic

  1. cheryld
    Original Member

    cheryld Silver Member

    Messages:
    701
    Likes Received:
    919
    Status Points:
    795
    Hi, well as anyone with any experience with Citi can attest to - be very careful when dealing with Citi banking promotions for miles. There are numerous threads on FT about this - but I thought I would post my most recent experience here for future reference.
    Opened both a checking and savings for DH under C2KE (20,000 miles for checking and 20,000 miles for savings accounts) over the phone on 10/28/10. Had sent messages making sure he had met the conditions of the promotion. 20,000 miles posted on 2/28. Sent another message to find out which account had received the miles and inquiring when the other miles would post. Now we are told that the incorrect 'type' of account was opened - it should have been a savings plus account and instead it was an ultimate savings account. What? I have already shot back a message referencing my other emails from them and stating our displeasure at the turn of events. Not sure what will happen - but I wanted to post this as a warning to anyone considering a deal like this in the future - double-check the exact type of accounts opened and make sure they are what was required.
     
  2. miles and smiles
    Original Member

    miles and smiles Gold Member

    Messages:
    17,531
    Likes Received:
    61,942
    Status Points:
    20,020
    Yes, Citibank is often a hassle to deal with. I got my 20,000 miles, but I have definitely decided not to deal with Citibank promos any more. I'm sticking with Citi Credit Cards as they are easier to deal with (and very generous with the miles)
     
  3. TrueBlueFlyer
    Original Member

    TrueBlueFlyer Silver Member

    Messages:
    493
    Likes Received:
    435
    Status Points:
    550
    Just got my 10K posted from the old promo of 20K for Citi checking account.

    Took one month longer because I screwed up doing the bill pay. Instead of scheduling payments using citi site, I just scheduled direct with cc's that were getting paid off.

    Luckily my account manager was very helpful correcting my mistake and getting my miles.
     
    miles and smiles likes this.
  4. travelfree
    Original Member

    travelfree Silver Member

    Messages:
    80
    Likes Received:
    76
    Status Points:
    285
    Thanks for posting the warning.

    I am sure you are not the only person to have or will in the future experience a similar situation.

    A good lesson to read the exact terms and verify that you meet the requirements.

    Sorry you had such a bad experience with Citi customer service.
     
    miles and smiles likes this.
  5. deant
    Original Member

    deant Milepoint Guide

    Messages:
    3,129
    Likes Received:
    12,385
    Status Points:
    10,620
    I think that most people who have gotten miles for Citi banking have been frustrated. Seems that, even if they have everything properly coded, they take the maximum amount of time possible to give the miles. My guess is that over 50% of the people need to follow up with Citi to get the miles posted.
     
    miles and smiles likes this.
  6. ArizonaGuy
    Original Member

    ArizonaGuy Silver Member

    Messages:
    490
    Likes Received:
    603
    Status Points:
    645
    Way off topic but what's with the online, report and "edit" iconified-button in the OP and quoted OP posts? They're FT specific, and edit links a FlyerTalk post that I of course can't actually edit since I didn't post it / am not a FT mod.
     
    HaveMilesWillTravel likes this.
  7. wanderlust
    Original Member

    wanderlust Silver Member

    Messages:
    230
    Likes Received:
    347
    Status Points:
    495
    I too had a bad experience trying to get miles from Citibank. The miles did not show up within the 90 day period after fulfilling the requirements as they stated. I called in, and after arguing with a lady for about 10 minutes about whether or not 90 days passed (I thought she was taking crazy pills by the end), she finally just said wait some two more days. Waited... nothing. Sent a secure message, was told I could expect the miles in 7-10 business days. Contacted them on the 12th business day. Three business days later, got the miles. Closed the account the next day over the phone.
     
  8. PedroNY
    Original Member

    PedroNY Silver Member

    Messages:
    205
    Likes Received:
    190
    Status Points:
    400
    Another major warning. CITIBANK issued 1099 forms for anyone who opened up an account (banking) and received AAdvantage miles in 2010. They priced value of miles at $.025, so if you received 5,000 miles you also got a 1099 for $125 additional income that you need to file for your taxes. There have been reports of trying to contest this with IRS and Citibank, but I am not sure if anyone has been successfull. Please be careful with Citibank banking when you trying to get AA miles.

    Best,

    PedroNY
     
    Kuhawkdave likes this.
  9. JohnDeere19
    Original Member

    JohnDeere19 Gold Member

    Messages:
    3,392
    Likes Received:
    6,892
    Status Points:
    4,625
    I believe there have also been reports of fixing this, no?
     
  10. bubb1
    Original Member

    bubb1 Silver Member

    Messages:
    38
    Likes Received:
    25
    Status Points:
    130
    I have not seen anybody report receiving a 1099 for anything other than the 5k for a savings account promo. Can anybody chime in on the checking side?
     
  11. JohnDeere19
    Original Member

    JohnDeere19 Gold Member

    Messages:
    3,392
    Likes Received:
    6,892
    Status Points:
    4,625
    Savings only from what I've heard as well...nothing from checking.
     
  12. cheryld
    Original Member

    cheryld Silver Member

    Messages:
    701
    Likes Received:
    919
    Status Points:
    795
    I thought both types of accounts were receiving 1099's - I am watching this so that I can be prepared for next year. Update for DH - Citi sent a message stating that he would receive the miles for the savings account. I will post again once the miles are actually in his account. Thank you to all the respondents!
     
  13. Tim
    Original Member

    Tim Admin

    Messages:
    445
    Likes Received:
    428
    Status Points:
    525
    I made an edit to the two posts that were sporting these inadvertently included links.
     
  14. travelingmore
    Original Member

    travelingmore Gold Member

    Messages:
    12,265
    Likes Received:
    75,420
    Status Points:
    16,520
    Mixed experience with opening a Citibank checking account for an AA miles promotion. While one supervisor did follow through and call me to see if miles posted from the first phase of the promotion, it usually took a long time to reach anyone on the phone and sometimes they gave contradictory info necessitating my request for a supervisor to attempt to clarify. Monthly service charges increased mid-promotion. Online access was easy and allowed us to keep up on account activity. Ultimately the cost and the effort to meet the min. req. (using debit card that we normally don't use, etc.) weren't worth it - YMMV.
     
  15. dkelly1110
    Original Member

    dkelly1110 Silver Member

    Messages:
    173
    Likes Received:
    179
    Status Points:
    395
    Since I can be a glutton for punishment, are there any offers out there for opening new checking accounts?
     
  16. euromannn
    Original Member

    euromannn Gold Member

    Messages:
    2,620
    Likes Received:
    8,619
    Status Points:
    7,070
    I just opened two CIti checking accounts for 30k, 25k promos. I was assured during application process it
    was only savings accounts that were sent 1099 forms.

    Today a Citi supervisor called and alerted me to the all checking accounts that exceed $600 would be sent a 1099-MISC form. Citi supervisor is trying to determine the value per point and whether both checking accounts were combined to get to $600 figure(she claimed no but.....I asked her to double check).

    One poster above claims that Citi charges $.025 per point. If so that would trigger the 1099-MISC as each promo would individually exceed $600 limit.
    IF 25k bonus: $.025 x 25k = $625
    IF 30k bonus: $.025 x 30k = $750


    So.......may not be limited to savings accounts only.......and obviously no 1099-MISC for Citi AA VISA/Amex bonuses.

    Will keep MP posted......

     
    JohnDeere19 likes this.
  17. euromannn
    Original Member

    euromannn Gold Member

    Messages:
    2,620
    Likes Received:
    8,619
    Status Points:
    7,070
    Citi Checking account promos do send 1099-MISC.
    25k promo= $625
    30k promo = $750

    What makes this issue so frustrating is Citi checking account division is inconsistent with Citi Credit Card and Brokerages(Fidelity, TD AMeritrade).

    1099-Misc is if a "gift" was received and it's value is over $600.

    Citi Credit Card which gives 75,000 AA bonus points does not generate 1099-MISC but Citi has no explanation for this inconsistency.

    Fidelity stated that it's 50k/$100k promo is NOT a gift but a promotion. Fidelity states it's legal position is a gift is a transfer of assets with no strings attached.

    Both Citi checking and Fidelity and TD AMeritrade attach "conditions" to the promo bonus.

    I think Citi checking promotion has unfairly taxed the AA bonus points as it assess "conditions" to the promotion and does NOT gift this without conditions met.

     
    bubb1 likes this.
  18. bubb1
    Original Member

    bubb1 Silver Member

    Messages:
    38
    Likes Received:
    25
    Status Points:
    130
    Thanks for following up on this and sorry you got burnt. At least your post will save others from this ridiculous practice.
     
  19. deant
    Original Member

    deant Milepoint Guide

    Messages:
    3,129
    Likes Received:
    12,385
    Status Points:
    10,620
    When I opened Citi checking accounts, it took a lot of effort to get the points. In the end, we did get them but it was not worth it, IMHO. However, at least we didn't get a 1099.
     
  20. slotownmomma
    Original Member

    slotownmomma Silver Member

    Messages:
    149
    Likes Received:
    81
    Status Points:
    325
    Thanks for this info. I have been sitting on the fence for quite awhile regarding doing their checking account deals. I have read so so much negative. I don't mind babysitting :) but this deal seems to be too much baby sitting to me. The Continental checking accounts last year where a breeze. I really wish a deal like that would come out again. Anyway see or hear anything?
     
  21. akcae
    Original Member

    akcae Silver Member

    Messages:
    187
    Likes Received:
    150
    Status Points:
    420
    With respect to the 1099s -- I believe IRS has ruled that miles have no value and therefore no 1099s are needed. Fidelity and Chase position that these miles are not gifts (since they do come with strings attached) make sense. What I've read on the other forum is that if you do receive a 1099 for miles, you don't have to file it with taxes, but retain for your records in an unlikely event of an audit (since Citi will report it to the IRS).

    Of course, I am NOT a tax lawyer, YMMV, etc.
     
  22. euromannn
    Original Member

    euromannn Gold Member

    Messages:
    2,620
    Likes Received:
    8,619
    Status Points:
    7,070
    I'd like to see an IRS advisory that "ANY" 1099-MISC can be ignored!

    The only 1099 documentation not reported to the IRS is a 1099-INT and that is only if it's less
    than $10.00

     
  23. akcae
    Original Member

    akcae Silver Member

    Messages:
    187
    Likes Received:
    150
    Status Points:
    420
    OK, I can't find where I read that IRS considers airline miles to be worthless for the purpose of income tax. I do remember a loooong thread on FT. Check out this View from the Wing post regarding disputing Citi's valuation: http://boardingarea.com/blogs/viewf...les-or-prizes-reported-as-taxable-to-the-irs/
     
  24. estnet
    Original Member

    estnet Gold Member

    Messages:
    1,749
    Likes Received:
    2,117
    Status Points:
    1,270
    I went through months of hassles to get promised points being referred back and forth btwn phone and the bank over a "coding" issue. I got to know the bank manager really well from sitting at her desk while she spoke to numerous people trying to sort it out. And all of this was when I qualified for their highest level of service (which obviously was pathetic).

    Guess who doesn't have an acct with citi anymore except for the AA cc?
     
    travelingmore likes this.
  25. Counsellor
    Original Member

    Counsellor Gold Member

    Messages:
    1,221
    Likes Received:
    1,620
    Status Points:
    1,120
    Two points here:

    1. IRS has never ruled that miles "have no value". Indeed, when taxing sales of miles, or winning of miles in a sweepstakes, the IRS makes it clear that they do have value and the IRS expects to collect excise or income tax on them. What you're probably thinking of is the limited ruling about 10 years ago where the IRS said that an employee who got to keep and redeem the miles he "earned" by flying on a ticket paid by his employer would not be required to list those miles as additional income, unless the miles were converted to cash or cash-equivalent (e.g., sold or bartered).

    2. You say you've read that "if you do receive a 1099 for miles, you don't have to file it with taxes". Probably true -- you don't have to file the 1099 with your taxes the same way you have to file your W-2, but you do have to declare the income reported on the 1099 on your tax return, and either pay taxes on it or explain why the income is not taxable. As for filing it and forgetting it, you should be aware that the IRS relies pretty heavily on computer matching, and if its computer sees that someone sent in a 1099 reporting income to a social security number, and that income is not reported on the tax return for that social security number, the computer is going to flag that discrepancy and that could result in a letter from the IRS or an audit.
     

Share This Page