Reporting errors cause huge jump in Citibank charge offs
By Credit.com Staff
The company said that its August charge offs - accounts 90 days or more behind and deemed uncollectable - jumped to 11.18 percent, up from 9.75 percent in July, an Associated Press report said. The surge was blamed on two factors, one financial, and the other a mistake.
Almost all the major lenders reported higher charge off rates in August. This means that the economy has gotten slightly worse as unemployment remains elevated, but Citibank also misreported several months of write offs, leading to the higher revised figures, the report said.
However, Citibank also reported that its delinquency rate - those accounts 30 days or more behind - dropped below 5 percent for the first time in months, the AP said. The August figure dropped to 4.95 percent from the 5.3 percent observed in July.
The difference in charge offs and delinquency could show that consumers who were already struggling with debt continued to do so, while others whose money troubles were not as bad experienced a better month.