New York Attorney General Letitia James has secured a legal victory in her lawsuit against Citibank (Citi), which accuses the bank of failing to protect its customers from fraud and denying reimbursement for stolen funds. The lawsuit claims that Citi misled its customers regarding their rights after their accounts were hacked and their money stolen. Judge Paul Oetken of the United States District Court for the Southern District of New York ruled that Citi misapplied the law when refusing to reimburse customers for unauthorized wire transfers.
This ruling means that Attorney General James’ case will continue, as the court found that the Electronic Fund Transfer Act (EFTA) applies to these unauthorized transactions.
In January 2024, James filed the lawsuit, alleging that Citi’s inadequate security practices allowed scammers to steal millions of dollars from New York residents. The lawsuit points out that Citi failed to implement robust data security systems and ineffective monitoring practices, leaving customers vulnerable to fraud. As a result, victims of these frauds lost significant sums of money, and Citi, despite being legally obligated, refused to reimburse the victims as required by law. The case aims to stop Citi’s deceptive practices and secure restitution for the customers who were wrongfully denied reimbursement over the last six years.
The lawsuit emphasizes that when New Yorkers deposit their money into a bank, they expect their funds to be protected from fraud and scams. Attorney General James stated that Citi’s failures to safeguard customer accounts have cost residents millions of dollars, making the case a matter of consumer protection. The court’s decision in favor of continuing the lawsuit highlights the importance of holding financial institutions accountable for the safety and security of their customers’ money.
This case is being handled by Assistant Attorney General Chris Filburn from the Consumer Frauds and Protection Bureau, which is part of the Division of Economic Justice. The Consumer Frauds and Protection Bureau is led by Bureau Chief Jane Azia and Deputy Bureau Chief Laura Levine. The goal is to not only hold Citi accountable for its lack of protection but also to ensure that consumers receive the compensation they are entitled to under the law.
