Citi Is Sued by New York State Over Account Transfer Fraud

New York State’s legal professional normal sued Citi on Tuesday, accusing it of failing to cease scammers from stealing an unspecified amount of cash from buyer accounts, and saying the financial institution ought to reimburse fraud victims for any losses.

The lawsuit, filed in federal courtroom, laid out quite a lot of methods through which Citi shoppers had been fooled into disclosing delicate data that allow hackers achieve entry to their accounts and steal thousands and thousands of {dollars}. In what are referred to as phishing scams, a number of the instances concerned Citi’s prospects receiving textual content messages or emails that presupposed to be from Citi however have been actually from criminals.

The New York legal professional normal, Letitia James, stated that Citi ought to have been suspicious when giant transfers have been requested from buyer accounts that had not had such actions for many years — and that solely minutes earlier than had their passwords modified.

In one occasion, when a buyer referred to as her native Citi department with worries a couple of phishing message that she had clicked on, she was informed by the financial institution, “Don’t worry about it — it happens all the time.” Three days later, greater than $40,000 was transferred out of her account, the lawsuit stated. Citi later denied her request to be reimbursed, saying it was her fault for clicking on the scammer’s message.

The lawsuit holds Citi accountable below the 1978 Electronic Fund Transfer Act.

“There is no excuse for Citi’s failure to protect and prevent millions of dollars from being stolen from customers’ accounts,” stated Ms. James, who, just like attorneys normal earlier than her, has angled for increased workplace.

A Citi spokeswoman, Danielle Romero-Apsilos, stated the financial institution was not required to reimburse prospects who have been victims of fraud. “Citi closely follows all laws and regulations related to wire transfers and works extremely hard to prevent threats from affecting our clients and to assist them in recovering losses when possible,” she stated in a press release.