07:11 AM EST, 01/22/2025 (MT Newswires) -- Citigroup ( C ) banking unit Citibank's motion to dismiss a lawsuit by New York Attorney General Letitia James, which alleges the bank failed to protect customers from online scams adequately and refused to reimburse victims, was denied on its core claims by a federal judge in Manhattan.

U.S. District Judge Paul Oetken ruled that Citibank must face charges of violating the Electronic Fund Transfer Act, or EFTA, and parts of three other claims.

New York Attorney General Letitia James sued Citigroup ( C ) in January 2024, alleging that scammers exploited weaknesses in Citibank's security systems, stealing millions of dollars. James' lawsuit also claims that the bank misled customers about their rights following account hacks and stolen funds, while unlawfully denying fraud victims reimbursement.

James said the court's decision means EFTA can be "applied to unauthorized wire transfers made through Citi's consumer accounts."

In a statement quoted by Reuters, Citigroup ( C ) said it was disappointed by the ruling and was reviewing its next steps. "The industry-standard practices we employ have long been recognized as satisfying applicable law," the bank said.

Citigroup ( C ) did not immediately respond to requests for comment from MT Newswires.