The New York State Attorney General’s Office announced Tuesday that it is suing Citibank for failing to protect customers from electronic fraud and secure refunds for victims, costing customers in the state millions of dollars.
Under litigation In a lawsuit filed in federal court in Manhattan, Attorney General Letitia James alleges that Citi’s lax security protocols allowed fraudsters to easily access users’ accounts and steal deposits through fraudulent wire transfers. did.
“Banks are supposed to be the safest place to keep your money, but Citi’s negligence allowed fraudsters to steal millions of dollars from hardworking people,” James said in a statement.
A Citi spokesperson said in a statement that the bank has taken steps to strengthen its security, resulting in a significant reduction in wire fraud.
But a spokesperson said the bank followed all laws and regulations related to wire transfers.
“If a customer follows 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,” the spokesperson said.
James’ lawsuit calls for Citibank to forfeit profits, pay a $5,000 fine for each violation, and require a third-party monitor to identify all affected customers. asked to appoint.
James said customers who reported fraud were placed on long phone holds and were told by City officials that their money would be refunded even if the bank did not take immediate steps to recover the funds.
Two customers are mentioned in the lawsuit. A woman had $40,000 stolen from her retirement savings account in 2021 after clicking a link in a text message that appeared to be from Citi.
The customer reported suspicious activity and was told there was no need to worry.
But three days later, she discovered that the scammer had changed her bank password and signed up for an online wire transfer.
The bank denied her claims of fraud.
Another New Yorker had $35,000 stolen from him after he checked his online account and found a message saying his account had been suspended and telling him to call a phone number.
The scammer tells her he will send her a Citi code to check for recent suspicious activity.
He then transferred the entire amount of the customer’s three savings accounts to his checking account, changed his online passwords, and stole $35,000.
