NY AG sues Citibank for failing to protect customers from hackers and scammers


New York Attorney General Letitia James filed a lawsuit against Citibank on Tuesday, alleging that the big bank failed to do enough to protect and compensate fraud victims.

The lawsuit says New York customers lost millions of dollars — in some cases their entire savings — to scammers and hackers because of Citi’s poor security and anti-fraud measures.

According to the New York AG, City are not doing enough To prevent unauthorized account takeovers, illegally refuse to compensate victims of fraud and “mislead” customers about their rights after their accounts are hacked.

the lawsuitThe lawsuit, filed in the U.S. District Court for the Southern District of New York, alleges that Citi “over-promised and failed to deliver regarding security” and failed to adequately respond to red flags.

“Banks are supposed to be the safest place to keep money, but Citi’s negligence allowed fraudsters to steal millions of dollars from hard-working people,” James said in a statement. There is no excuse for Citi’s failure to protect and prevent the theft of millions of dollars from customer accounts, and my office will not expunge illegal behavior from major banks.

New York prosecutors allege that Citi requires customers to sign “coercive” disclosures that allow the bank to address fraud claims by narrowing commercial laws surrounding wire transfers rather than the more substantive protections provided by the Electronic Fund Transfer Act, a landmark consumer protection law.

“Citi then summarily denies the reimbursement claims and instead blames consumers,” the lawsuit states.

“Citi closely follows all laws and regulations related to wire transfers and works extremely diligently to prevent threats from impacting our customers and assist them in recovering losses when possible,” a Citi spokesperson said in a statement to CNN. “Banks are not required to make customers whole when those customers are following the instructions of criminals and banks cannot see any indication that customers are being scammed.”

Given the “industry-wide spike in online fraud over the past few years,” Citi said it has taken steps to proactively protect its clients’ accounts with the latest security tools, fraud prevention tools, and information about fraud.

“Our actions have significantly reduced customers’ online fraud losses, and we remain committed to investing in fraud prevention measures to help our customers secure their accounts against emerging threats,” a Citi spokesperson said.

Last year, federal regulators charged Citi illegally Discrimination against Armenian Americans For years, they were singled out on credit card applications based on their last names.

This is a developing story, more to come.

For more CNN news and newsletters, create an account at CNN.com

Leave A Reply

Your email address will not be published.