- New York Attorney General filed lawsuit against Citibank for failing to protect customers from online banking fraud and refusing to reimburse victims.
- Lawsuit alleges Citibank does not have adequate protections to prevent unauthorized account takeovers, misleads victims, and illegally denies reimbursements, costing customers millions.
- Citibank claims it works to prevent fraud and assist victims, but banks are not required to reimburse customers who follow criminal instructions. Citibank says it has implemented security protocols to reduce customer fraud losses.
The New York Attorney General has filed a lawsuit against Citibank for allegedly failing to protect customers from online banking fraud and refusing to reimburse victims.
Background on the Lawsuit
New York Attorney General Letitia James filed the lawsuit on Tuesday, alleging that Citibank does not have adequate protections in place to prevent unauthorized account takeovers. The lawsuit claims that Citibank misleads fraud victims and illegally denies reimbursements.
The attorney general’s office said Citibank’s negligence has cost New Yorkers millions of dollars, with some customers losing their entire life savings. Attorney General James said that banks have a fundamental duty to secure customer accounts, and Citibank has failed in this basic responsibility.
The Lawsuit’s Allegations Against Citibank
The lawsuit makes several specific allegations against Citibank:
- Failing to prevent unauthorized account takeovers
- Misleading fraud victims
- Illegally denying reimbursements to victims
- Costing victims millions of dollars in stolen funds
- Failing to secure customer accounts against fraud
The lawsuit includes stories of specific Citibank customers who had thousands of dollars stolen and were denied reimbursement by the bank.
Citibank’s Response
In response to the lawsuit, Citibank said that it works extremely hard to prevent fraud threats and assist customers who become victims. However, banks are not required to reimburse customers who follow a criminal‘s instructions.
Citibank said it has implemented leading security protocols, fraud prevention tools, and customer education to help secure accounts. The bank says its actions have significantly reduced customer losses from wire transfer fraud.
Conclusion
The New York Attorney General alleges Citibank is violating the Electronic Fund Transfer Act by failing to reimburse victims of online banking fraud. The lawsuit aims to force Citibank to implement stronger protections and repay customers who lost funds to unauthorized account takeovers.
