Citibank is facing serious allegations from New York Attorney General Letitia James, who filed a lawsuit in US District Court for the Southern District of New York. The lawsuit accuses Citibank of unlawfully refusing to reimburse victims of scams, pointing to deficiencies in its online security practices.
According to the lawsuit, Citibank is accused of failing to implement strong online protections, misleading customers about their rights after fraudulent account activity, and denying reimbursement to fraud victims. These alleged actions have reportedly led to significant financial losses for affected individuals, including the loss of life savings and essential funds.
One specific case highlighted in the lawsuit involves a New York woman who fell victim to a scam in July 2022, resulting in a loss of $35,000. Despite receiving suspicious messages and calls, the victim’s accounts were compromised, and unauthorized wire transfers were approved by Citibank without direct confirmation from the customer. Similar incidents of fraudulent activity and subsequent denial of reimbursement are detailed in the lawsuit.
In response, Citibank has defended its security measures and refund policies, stating that it complies with relevant laws and regulations. However, the Attorney General argues that Citibank is obligated to reimburse victims under the Electronic Fund Transfer Act (EFTA), which mandates reimbursement for unauthorized transactions reported promptly by customers.
The lawsuit seeks various remedies, including a permanent injunction against Citibank, restitution for affected customers, and civil penalties. As the legal proceedings unfold, the case highlights the importance of robust cybersecurity measures and consumer protections in the financial industry.
