Security News > 2024 > January > Citibank sued over failure to defend customers against hacks, fraud
New York Attorney General Letitia James sued Citibank over its failure to defend customers against hacks and scams and refusing to reimburse victims after allowing fraudsters to steal millions from their accounts.
The complaint claims that because it's providing online and mobile banking options for wire transfers, Citibank should also compensate fraud victims, akin to the protections afforded to victims of electronic credit or debit card fraud under the same legislation.
Citibank failed to flag and prevent attempts to transfer funds from multiple accounts into a single account, making it easy for malicious actors to quickly transfer tens of thousands of dollars from their victims' Citibank accounts within minutes.
Victims reporting fraud to Citibank also face lengthy telephone holds, allowing scammers to keep transferring stolen funds to bank accounts under their control at third-party banks.
Citibank representatives also allegedly falsely assured customers who had their accounts hacked or taken over by scammers that their funds were secure and promised the return of stolen funds without taking immediate action.
They falsely directed consumers to local Citibank branches to execute special affidavits detailing the scams they fell victim to, information that was subsequently used to blame the victims and deny their reimbursement claims using boilerplate letters listing predetermined conclusions, such as failure to adequately safeguard their own accounts or handing over their account info to scammers.