The New York attorney general’s office on Tuesday said it has sued Citibank for allegedly failing to protect customers from electronic fraud and secure refunds for victims, which it says has cost customers in the state millions of dollars.
In a lawsuit filed in Manhattan federal court, Attorney General Letitia James alleged that Citi’s lax security protocols allowed fraudsters to gain easy access to user accounts and steal their deposits through unauthorized wire transfers.
“Banks should be the safest place to keep money, yet Citi’s negligence has allowed fraudsters to steal millions of dollars from hard-working people,” James said in a statement.
In a statement, a Citi spokesperson said the bank has taken steps to improve security, resulting in a significant decrease in wire fraud.
But the spokesman said the bank had complied with all laws and regulations relating to wire transfers.
“The bank does not have to make the customer whole when the customer is following the criminal’s instructions and the bank cannot see any indication that the customer is being defrauded,” the spokesperson said.
Attorney General Letitia James alleged that Citi’s lax security protocols allowed fraudsters to gain easy access to user accounts and steal their deposits through unauthorized wire transfers. Getty Images
James’ lawsuit asks Citibank to cut profits, pay a $5,000 fine for each violation and appoint a third-party monitor to identify all customers who were harmed.
James said customers who reported fraud were subject to long phone holds, and were told by Citi staff that they would get a refund even if the bank did not take immediate steps to recover the funds.
The lawsuit names two customers. A person had $40,000 stolen from his retirement savings account in 2021 after clicking on a link in a text message that appeared to be from Citi.
James said customers who reported fraud were subject to lengthy phone holds, and were told by Citi staff that they would get a refund even if the bank did not take immediate steps to recover the funds. AP
Customers report suspicious activity and are told not to worry.
But three days later he discovered the fraudster had changed his banking password and signed up for an online wire transfer.
The bank denied his claims of fraud.
Another New Yorker was robbed of $35,000 after checking his online account and found a message saying it had been suspended and telling him to call a phone number.
A scammer said he would send a Citi code to verify recent suspicious activity.
He then transferred all the money in three customer savings accounts into his checking account, changed his online password and stole $35,000.
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Source: thtrangdai.edu.vn/en/
