Unsettled Issue: Lawsuit Alleges Harassment Continued Even After Settlement, Citigroup Purchase

Barbara Buie’s troubles with her finance company never seemed to stop. Buie, a teacher from Fayette, Miss., says she’d get behind, promise to make a payment in a week, then get another call the next day demanding money.

Finally, in March 2000, Buie and about 100 other Mississippians reached a deal with First Family Financial Services, a subsidiary of Associates First Capital Corp. First Family agreed to pay them cash settlements and erase their remaining debts with the company, settling claims the lender had targeted minorities, the elderly and the poor for predatory loans.

“I thought that was the end of it,” Buie says.

But it wasn’t.

Buie is one of 50 ex-customers who claim in a new lawsuit that company employees refused to abide by the settlement, instead embarking a campaign of reprisal that continued through the spring of 2002—long after Citigroup had bought Associates and rolled First Family into its CitiFinancial network.

The suit says managers and other employees retaliated against them with harassing phone calls and other aggressive efforts to collect debts that were no longer owed. When the ex-customers brought in documents outlining the settlement, the suit says, company employees brushed them off, in one instance promising to make their lives a “living hell.”

“Whoever it was who was in charge at that time,” borrowers attorney Albert Lewis III says, “it certainly reflects poorly on them.”

Buie says she went into the lender’s Vicksburg branch again and again with proof her account was settled. Months later she got a phone call from her sister with distressing news: The company had posted a notice advertising her home for foreclosure sale on the courthouse steps.

She says her 10-year-old son was so upset “he would wake up at night crying and having nightmares, saying ‘I want my home back.’” Only after her attorney intervened, Buie says, did the company put the foreclosure sale on hold and stop sending her notices.

CitiFinancial’s attorneys say in court papers that the ex-customers’ “insubstantial claims” have no chance of prevailing. Citi’s attorneys add that one employee named in the suit wasn’t working at the time of the alleged harassment and that another worked at a CitiFinancial branch that never serviced First Family loans. A Citigroup spokesman declined comment.

Buie says she “would have been at peace” if the company had just left her alone after the settlement. But now she’s angry, and says the company should be punished for the way it has treated its customers.

“It’s not so much about money,” she says. “It’s about justice.