Attorney General James Announces Court Win Allowing Lawsuit Against Citibank to Continue
New York Attorney General Letitia James announced a significant victory in her case against Citibank (Citi) after a judge denied Citi’s motion to dismiss the Office of the Attorney General’s (OAG) lawsuit. The lawsuit centers on claims that Citi failed to protect and reimburse victims of fraud. It alleges that Citi misleads its customers about their rights after their accounts are hacked and funds are stolen, illegally denying reimbursement to fraud victims.
Judge Paul Oetken of the United States District Court for the Southern District of New York ruled that Citi misapplied the law when denying consumers’ claims for reimbursement. This decision ensures that Attorney General James’ lawsuit against Citi will proceed. Notably, the court found that the Electronic Fund Transfer Act (EFTA), a landmark consumer protection law, applies to unauthorized wire transfers made through Citi’s consumer accounts.
“When New Yorkers deposit their money in a bank, they expect it to be kept safe from scammers and thieves,” said Attorney General James. “Citi’s failures to protect its customers’ accounts are costing New Yorkers millions of dollars. Today’s decision will allow us to continue our case against Citi to help those whose savings were stolen and ensure the bank follows the law to protect its customers.”
In January 2024, Attorney General James filed the lawsuit against Citi, one of the nation’s largest banks, for its alleged failure to protect consumers who fall victim to fraud. The lawsuit claims that scammers can exploit weaknesses in Citi’s systems due to the bank’s inadequate data security, ineffective monitoring systems, and insufficient real-time responses to fraud incidents. As a result, New Yorkers have lost millions of dollars to scammers. While Citi was obligated to reimburse these losses, today’s ruling found that the bank misapplied the law to evade its responsibilities.
Attorney General James is seeking to stop Citi’s deceptive practices and secure restitution for victims who were denied reimbursement over the past six years. Additionally, the lawsuit seeks penalties and disgorgement of profits gained through these practices.
This matter is being handled by Assistant Attorney General Chris Filburn of the Consumer Frauds and Protection Bureau, which is led by Bureau Chief Jane Azia and Deputy Bureau Chief Laura Levine. The bureau is part of the Division of Economic Justice, overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.