Story Highlights
- Citigroup, a major player in the US banking sector, is defending against a lawsuit by New York Attorney General Letitia James.
- The lawsuit accuses Citibank of failing to reimburse customers who fell victim to online scammers.
Citigroup’s Response
Citigroup has pushed back against the lawsuit, deeming it “misguided” and calling for its dismissal. The bank argues that the lawsuit misinterprets federal laws governing electronic fund transfers, which exclude wire transfers from liability. Citigroup asserts its adherence to the Uniform Commercial Code, which exempts banks from reimbursing losses if they have implemented adequate security measures.
Security Measures
Citigroup claims to have implemented commercially reasonable security measures to combat online wire fraud, preventing numerous fraudulent transactions daily. The bank emphasizes the challenges of preventing every scam and questions the effectiveness of legal action in addressing online fraud.
Allegations by Attorney General
New York Attorney General Letitia James alleges that Citibank’s security systems failed to detect warning signs of potential scams, resulting in financial losses for customers. Instances include customers losing significant amounts, such as $40,000 in retirement savings due to a fraudulent text message.
Remedies Sought
James seeks substantial remedies from Citibank, including compensation for defrauded customers, civil fines per violation, and the appointment of an independent monitor to review bank records and aid in identifying victims. The attorney general accuses Citibank of pressuring victims into limiting their ability to recover losses through signed affidavits.
