Citibank in Germany is right on schedule in launching a cobranded payment card with the Deutsche Bahn, the state-owned railway system.

But the big bank card issuer did not expect to collide with consumer activists in Germany, who are accusing Citibank of using underhanded methods to attract cardholders, according to The Wall Street Journal.

This month Citibank Privatkunden AG, the German consumer banking unit, began targeting the three million customers of Deutsche Bahn through direct mail, as it had pledged last year.

The letters invite Bahn users to apply for a new rail pass, but instead of a simple pass, Citibank is offering one that combines a personal photograph on the card with a Visa credit or debit service.

The debit version, an on-line Visa Electron product that is linked to a checking account, is being marketed as an alternative for people who do not want a credit card, or for people who do not qualify for credit.

Because credit cards are not popular in much of Europe, it is likely that many customers will not choose the credit card option.

Consumer groups claim Citibank's applications do not clarify that rail customers can also get a new Bahn card without a financial-payment feature.

Bahn riders over 18 who simply want to use the pass for train travel will receive an Electron card, but the debit function can remain dormant if cardholders don't supply Citibank with the relevant information about their bank accounts, or if they elect not to open such accounts.

People under age 18 get an upgraded Bahn card with a photograph and still qualify for the 50% discount on rail travel that is a standard feature of the basic Deutsche Bahn pass. Unlike with the Visa Electron and credit cards, Citibank is not including its name on the card for minors, though the bank is still responsible for issuing these non-financial cards.

It is not clear how Citibank will respond to the consumer complaints.

"We feel the material is appropriate in the German marketplace" and the application forms are not unusual, said a spokeswoman in New York.

Citibank's alliance with Deutsche Bahn is critical because if it succeeds, Citibank could become the largest issuer of credit cards in Germany. With about 300,000 card accounts, Citibank is fourth behind Berliner Bank, Deutsche Bank, and Banco Santander.

Citibank's commitment to Germany's consumer market is evident in other areas as well. The bank's branch network there - at 300 offices - is second only to its U.S. presence.

Worldwide, Citibank is the largest issuer of credit cards, with 50 million in 30 countries. It has earned the distinction of being the only American bank with a truly global card operation.

"We have unique technological, logistic, and human resources at our disposal, which are now also going to benefit German BahnCard customers," Roberta J. Arena, executive vice president of Citibank's North American and European card businesses, said in a prepared statement.

Citibank said it expects to convert 300,000 Deutsche Bahn cards each month.

Eventually, the partners want to provide telephone calling card services as well.

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