NEW YORK – A New York District Court ruling will allow a lawsuit against Citibank to continue.
The lawsuit alleges Citi misleads its customers about their rights after their accounts are hacked and funds are stolen and illegally denies reimbursement to victims of fraud, the New York Attorney General’s office reported.
The decision, handed down by Judge Paul Oetken of the United States District Court for the Southern District of New York, held that Citi misapplied the law when denying consumers’ claims for reimbursement.
In particular, the court found that a landmark consumer protection law known as the Electronic Fund Transfer Act (EFTA) applied to unauthorized wire transfers made through Citi's consumer accounts.
“When New Yorkers deposit their money in a bank, they expect it to be kept safe from scammers and thieves,” said New York Attorney General Letitia James. “Citi’s failures to protect its customers’ accounts are costing New Yorkers millions of dollars. Today’s decision will allow us to continue our case against Citi to help those whose savings were stolen and ensure the bank follows the law to protect its customers.”
In January 2024, James sued Citi, one of the largest banks in the country, for failing to protect its consumers when they fall victim to fraud. The lawsuit alleges that scammers can steal from Citi’s customers because the bank fails to implement strong data security and anti-breach practices.
“As a result of Citi’s inadequate security, ineffective monitoring systems, and failure to respond in real-time and properly investigate fraud claims, New Yorkers have lost millions to scammers. While Citi was obligated to reimburse those losses, today’s decision found that the bank misapplied the law to avoid its obligations to consumers,” the AG’s office said.
The AG’s office is seeking to stop Citi’s “deceptive practices” and to collect restitution for victims who were denied reimbursement in the last six years, as well as penalties and disgorgement.