Citigroup has filed a motion urging U.S. District Judge Paul Oetken to dismiss a lawsuit initiated in January by New York Attorney General Letitia James. The lawsuit claims that Citibank, a division of Citigroup, failed to reimburse customers who fell victim to online fraud. A spokesperson for Citigroup confirmed the bank’s position to Reuters on Tuesday.
In their defense, Citigroup’s legal team stated that the bank has implemented comprehensive procedures designed to protect consumers from scams involving fraudulent transfers. “Citi closely follows all laws and regulations related to wire transfers and works extremely hard to prevent threats from affecting our clients and to assist them in recovering losses when possible,” the spokesperson said.
Attorney General James’s lawsuit alleges that Citibank’s inadequate security measures allowed scammers to access customers’ accounts easily, leading to unauthorized wire transfers that resulted in significant financial losses for customers. James emphasized that “Citi’s negligence” has cost New York residents millions of dollars.
In April, Citigroup formally requested that the federal court dismiss the lawsuit, arguing that according to the Uniform Commercial Code—which is adopted by all U.S. states—banks are not liable for losses if they have taken commercially reasonable security measures in good faith to verify customer identities.
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