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Citi pushes back on New York lawsuit over fraud scams, Bloomberg News reports
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Citi pushes back on New York lawsuit over fraud scams, Bloomberg News reports
Oct 10, 2024 9:43 PM

Oct 8 (Reuters) - Citigroup's ( C/PN ) lawyers have urged

U.S. District Judge Paul Oetken to dismiss a suit filed in

January by Attorney General Letitia James, which accuses its

Citibank unit of failing to reimburse customers who fall victim

to online scammers, Bloomberg News reported on Tuesday.

The lawyers said the bank has robust and extensive

procedures to protect consumers from being scammed into making

fraudulent transfers, the report added.

James, New York state's attorney general, sued Citibank unit

in January, alleging that its lax security protocols allowed

scammers to gain easy access to users' accounts and steal their

deposits through unauthorized wire transfers.

She stated that "Citi's negligence" had cost customers in

the state millions of dollars.

The Bloomberg report added that Citi said U.S. banks will

have to make a "dramatic shift" in how electronic payments are

processed if New York state wins the lawsuit.

Citi urged a federal judge in April to dismiss the lawsuit,

saying that the proper standard from the Uniform Commercial

Code, which all U.S. states use, excuses banks from covering

losses if in good faith they adopt commercially reasonable

security measures to verify customer identities.

Citigroup ( C/PN ) and James' office did not immediately respond to

Reuters' requests for comment.

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