New York is suing one of America’s largest banks for allegedly implementing weak security measures, misleading customers about their rights and refusing to reimburse fraud victims as required by law.
New York Attorney General Letitia James says her office has decided to sue Citibank after the financial giant failed to protect its customers over the past six years.
The AG says Citibank’s digital defenses do not respond effectively to many red flags, including:
- Unusual transfers from multiple accounts to one account
- The use of unknown devices
- Account access from new locations
- Attempts to change online banking passwords and usernames
“As a result of Citi’s lax security, New York customers have lost millions of dollars, and in some cases their entire life savings, to scammers and hackers.
Attorney General James is seeking to hold Citi accountable for failing to protect its customers and is requiring the company to reimburse defrauded New Yorkers with interest, pay fines and implement enhanced anti-fraud measures to prevent scammers from stealing consumers’ money.
The AG also notes that Citi does not conduct its own investigations into cases of fraud and does not report them to the competent authorities after receiving reports from customers.
When the bank receives desperate calls from fraud victims, the AG also says Citi is too slow to respond effectively.
“When victims contact the bank to report fraud, Citi leaves them on hold for extended periods of time, allowing scammers to continue their fraud.”
In addition to failing to protect customers from online banking scammers, the AG alleges that Citi engages in deceptive practices in an attempt to circumvent the law and deny refunds to customers.
“Under the EFTA (Electronic Fund Transfer Act), banks like Citi are required to reimburse their customers for money in their accounts that is lost or stolen due to unauthorized electronic payments. However, Citi illegally used a limited exception in these laws to deny consumer claims for reimbursement, resulting in millions of dollars in losses for New York consumers.”
James’ office is asking Citi to forfeit profits, pay a $5,000 fine for each violation of the law and appoint an independent third party who will identify any client harmed by the company’s alleged illegal practices the couch.
Says Attorney General James,
“Banks should be the safest place to keep money, but Citi’s negligence has allowed scammers to steal millions of dollars from hardworking people.
Many New Yorkers rely on online banking to pay bills or save for big milestones, and if a bank cannot secure its customers’ accounts, they are failing in their most fundamental duty.
There is no excuse for Citi’s failure to protect and prevent the theft of millions of dollars from customers’ accounts, and my office will not write off illegal behavior by major banks.”
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