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Investing.com -- New York Attorney General Letitia James announced today that her case against Citibank (NYSE:C) will proceed after a judge denied the bank's motion to dismiss. The case revolves around allegations that Citibank failed to protect and reimburse customers who were victims of fraud.
The lawsuit asserts that Citibank misled its customers about their rights following unauthorized access to their accounts and theft of funds. The bank is also accused of refusing to reimburse victims of fraud unlawfully. Judge Paul Oetken of the United States District Court for the Southern District of New York ruled that Citibank had incorrectly applied the law when denying consumers' claims for reimbursement.
The court found that the Electronic Fund Transfer Act (EFTA), a landmark consumer protection law, applies to unauthorized wire transfers made through Citibank's consumer accounts. This decision means that the lawsuit filed by Attorney General James against Citibank will continue.
Attorney General James commented on the court victory, stating that when New Yorkers deposit their money in a bank, they expect it to be safeguarded from fraudsters. She added that Citibank's failure to protect its customers' accounts has resulted in significant financial losses for New Yorkers.
In January 2024, Attorney General James filed a lawsuit against Citibank, one of the largest banks in the United States, for its alleged failure to protect consumers from fraud. The claim suggests that the bank's lack of robust data security and anti-breach measures allows scammers to steal from its customers.
The lawsuit also alleges that due to Citibank's inadequate security, ineffective monitoring systems, and failure to investigate fraud claims promptly, New Yorkers have lost millions to fraudsters. Although Citibank was obliged to reimburse these losses, the court's decision today found that the bank had misapplied the law to evade its responsibilities to consumers.
Attorney General James aims to halt Citibank's alleged deceptive practices and collect restitution for victims denied reimbursement in the past six years. She is also seeking penalties and disgorgement.
Assistant Attorney General Chris Filburn, with the Consumer Frauds and Protection Bureau, is handling this matter. The Bureau is led by Bureau Chief Jane Azia and Deputy Bureau Chief Laura Levine, and is part of the Division of Economic Justice, overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.
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