New York Attorney General Sues Citibank
From the desk of Jim Eccleston at Eccleston Law
New York Attorney General Letitia James has shifted away from her filing a politically motivated action to now file a lawsuit against Citibank, accusing the bank of inadequately safeguarding customers from online banking scams and refusing to reimburse victims. The complaint alleges that Citibank lacks sufficient safety measures and security protocols, allowing fraudsters to exploit online and mobile banking channels, including wire transfers and payment apps like Zelle and Venmo. Attorney General James contends that Citibank failed to implement robust data security measures, respond adequately to red flags, or limit theft by scams.
According to AdvisorHub, the lawsuit targets Citibank's data security practices amid a surge in financial fraud, where scammers employ sophisticated tools, including artificial intelligence. Citibank asserts compliance with wire transfer laws and regulations, stating it diligently works to prevent threats and assist clients in recovering losses. The bank argues against reimbursement when customers follow scammers' instructions, claiming it cannot discern fraudulent activity in such cases.
The lawsuit includes claims from Citibank customers in New York, including an individual who reported $40,000 stolen from a retirement account after interacting with a text message that appeared to be from Citibank. The state seeks an order compelling Citibank to provide an account of customer claims related to lost money from unauthorized payment orders and denied debit authorizations in the past six years. Additionally, the state seeks restitution, damages for customers, and penalties.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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