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The US state’s attorney general claims fraud victims were scammed out of millions and that Citibank denied these victims help or refunds.
New York’s attorney general Letitia James is suing Citibank for allegedly failing to protect and reimburse victims of fraud.
James’ lawsuit claims that Citi does not implement strong online protections to stop account takeovers and that the bank misleads account holders about their rights after their funds are stolen. The lawsuit also alleges that Citi illegally denies reimbursement to fraud victims.
The attorney general said she aims to hold Citi accountable for its alleged failures and wants the company to pay back defrauded victims with interest. The lawsuit also wants Citi to pay penalties and adopt “enhanced anti-fraud defences” to prevent scammers from stealing funds in the future.
“Thousands of New Yorkers have been scammed out of millions, with some losing their lifesavings,” James said. “When victims of fraud contact the bank for help and refunds, they are denied.”
“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 basic duty. There is no excuse for Citi’s failure to protect and prevent millions of dollars from being stolen from customers’ accounts and my office will not write off illegal behaviour from big banks.”
The attorney general referenced examples of New York victims losing tens of thousands of dollars from fraud and claims that when the bank was informed, it failed to take action. In one example, a local Citi branch allegedly told one victim to not worry about it, after they clicked on a malicious link. Three days later, this victim discovered that a scammer changed her banking password, enrolled in online wire transfers, transferred $70,000 from her savings to her checking account and electronically executed a $40,000 wire transfer.
“For weeks, the customer continued to contact the bank and submit affidavits, but in the end, she was told that her claim for fraud was denied,” the attorney general said in a statement.
A Citi spokesperson told CNN that the bank closely follows all laws related to wire transfers and works “extremely hard” to prevent threats from affecting its clients and to assist them in recovering losses.
Fraud is a constant threat for bank users around the world. Last year, Permanent TSB partnered with Expleo to bring an anti-fraud software feature to its banking app.
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