Citibank Sued for Failing to Protect Customers from Fraud

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.

Deceptive Practices

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.

Legal Action

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.”