Citibank was sued by New York Attorney General Letitia James for allegedly failing to adequately protect customers from online banking scams and refusing to reimburse victims.
The bank hasn’t put in place sufficient safety measures and security protocols to prevent fraudsters from stealing money through online and mobile banking, including by wire transfers or through payment apps including Zelle and Venmo, James said in a suit filed Tuesday in federal court.
Citi has failed to use “sufficiently robust data security measures to protect consumer financial accounts, respond appropriately to red flags, or limit theft by scam,” the attorney general alleged in the complaint.
The bank didn’t immediately respond to emails seeking comment on the suit.
James claimed Citi isn’t complying with the federal Electronic Fund Transfer Act by blaming customers who fall victim to online scams rather than adequately securing their accounts and failing to reimburse losses when the law requires it.
The state is seeking an order forcing Citibank to provide an accounting of all customer claims for lost money connected to unauthorized payment orders and debit authorizations that were denied in the last six years. It’s also seeking restitution and damages for the customers, plus penalties.
The case is New York v. Citibank N.A., 24-cv-00659, US District Court, Southern District of New York (Manhattan).
This article was provided by Bloomberg News.