AG James to Citibank: No More Ignoring Red Flags

  • New York AG Letitia James filed a lawsuit against Citibank, N.A. alleging that the bank violated New York’s Executive Law and General Business Law by failing to enact sufficient data security measures or sufficiently respond to fraudulent activity to protect consumer funds.
  • According to the complaint, the federal Electronic Fund Transfer Act provides consumers with substantial protection against the theft of their funds by fraud and scammers, and requires banks to refund money that was lost or stolen through unauthorized electronic payments. AG James alleges that Citibank has refused to reimburse funds to which consumers are entitled under the EFTA by improperly relying on a narrow exception to the rule. She also alleges that Citibank has failed to effectively protect money from being transferred in the first place and to appropriately respond to red flags indicating scams, thefts, or unauthorized account takeovers are occurring.
  • The lawsuit seeks injunctive relief, an accounting of consumers harmed by the allegedly illegal practices, restitution and damages, disgorgement, civil penalties, and costs, among other relief.