From CNBC:

New York Attorney General Letitia James has sued Citibank for its alleged failure to protect and reimburse victims of electronic fraud. The lawsuit claims that Citi lacks strong protections to prevent unauthorized account takeovers, misleads fraud victims, and illegally denies reimbursements, costing New York account holders millions of dollars and even their life savings.

The lawsuit against Citibank comes after the bank’s struggle with risk management and controls. A former executive stated that Citigroup underinvested in its infrastructure, as evident when Citigroup accidentally sent almost $900 million to Revlon’s lenders in 2020. Citigroup was fined $400 million by banking regulators and ordered to improve risk management systems.

The New York lawsuit includes specific people who had thousands of dollars stolen from their accounts and said the bank did not reimburse them. In response, Citi stated that they work hard to prevent threats and assist customers who become victims of fraud. They have also taken proactive steps to safeguard client accounts, reduce wire fraud losses, and continue to invest in fraud prevention measures.

New York Attorney General alleges that Citi must reimburse victims of fraud under the Electronic Fund Transfer Act. Citi claimed that banks are not required to make customers whole in cases where customers follow criminals’ instructions and banks see no indication of deception. However, the company remains committed to investing in fraud prevention measures to secure client accounts against emerging threats.



Read more: New York sues Citibank for alleged failure to reimburse fraud victims