new york
CNN
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New York Attorney General Letitia James filed a lawsuit against Citibank on Tuesday, accusing the major bank of failing to do enough to protect and reimburse fraud victims.
The suit alleges that Citi’s weak security and fraud prevention measures have caused New York customers to lose millions of dollars (and in some cases their entire savings) to scammers and hackers.
According to NYAG: City are not trying hard enough To prevent unauthorized account takeovers, they illegally deny refunds to fraud victims and “mislead” customers about their rights after their accounts are hacked.
of lawsuitThe lawsuit, filed in the U.S. District Court for the Southern District of New York, alleges that Citi “over-promised and under-delivered with respect to security” and failed to adequately respond to red flags.
“Banks are supposed to be the safest place to keep your money, but Citi’s negligence has allowed fraudsters to steal millions of dollars from hardworking people,” James said in a statement. Stated. 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 the big banks’ wrongdoing. ”
NY AG alleges that Citi forced customers to sign “compulsory” affidavits that allowed the bank to comply with commercial law regarding wire transfers, rather than the more substantive protections of the Electronic Funds Transfer Act, a landmark consumer protection law. It argues that the scope of the law has been narrowed to allow it to deal with claims of fraud.
“Citi then promptly denies the refund request and instead blames the consumer,” the lawsuit states.
In a statement to CNN, a Citi spokesperson said: “Citi strictly adheres to all laws and regulations related to wire transfers and is committed to preventing threats affecting our customers and, where possible, assisting in the recovery of losses. We are working very hard.” “If a customer complies with the criminal’s instructions, the bank does not have to make the customer whole, and the bank cannot see any signs that the customer is being deceived.”
As wire fraud has “expanded across the industry” over the past few years, Citi said it has taken steps to proactively protect customer accounts using the latest security, fraud prevention tools and information about fraud.
A Citi spokesperson said: “Our efforts have significantly reduced our customers’ wire fraud losses. We remain committed to investing in fraud protection to help our customers protect their accounts from emerging threats. We will work on it.”
Last year, federal regulators alleged that Citi had been unlawfully discriminating against Armenian-Americans for years, identifying them based on their last names when applying for credit cards.
This is a developing story with more to come.
