Lax Security Measures and Deceptive Practices Alleged
New York Attorney General Letitia James has filed a lawsuit against Citibank, accusing the banking giant of failing to protect its customers from fraud, deceiving them about their rights, and refusing to reimburse fraud victims as required by law.
Weak Digital Defenses
The lawsuit alleges that Citibank’s digital defenses are inadequate and fail to respond effectively to red flags, such as:
- Unusual transfers from multiple accounts into a single account
- Use of unknown devices
- Account access from new locations
- Attempts to change online banking passwords and usernames
Millions of Dollars Lost
As a result of Citibank’s lax security, New Yorkers have lost millions of dollars to scammers and hackers. In some cases, victims have lost their entire life savings.
Slow Response to Fraud Reports
The lawsuit also alleges that Citibank is slow to respond to fraud reports, leaving victims on lengthy telephone holds while scammers continue their fraud.
Citibank is also accused of engaging in deceptive practices to deny customer refunds. The lawsuit alleges that Citibank illegally exploited a narrow exception in the Electronic Fund Transfer Act (EFTA) to deny consumer claims for reimbursement, resulting in millions of dollars in losses for New York consumers.
Attorney General James is seeking to hold Citibank accountable for its actions. She is asking the court to order Citibank to:
- Disgorge profits
- Pay a $5,000 fine for each violation of law
- Appoint an independent third party to identify every customer harmed by the bank’s alleged illegal practices
Statement from Attorney General James
“Banks are supposed to be the safest place to keep money, yet Citi’s negligence has allowed scammers to steal millions of dollars from hardworking people,” said Attorney General James. “My office will not write off illegal behavior from big banks.”