Customers Sue Citibank After They Refuse to Pay Back the Money Lost During Security Glitch

However, the famous institution is now facing some seriously horrific publicity. Citibank is currently being charged in New York City with failing to care for its customers who were scammed out of their hard-earned money, and people are outraged.

New York Attorney General Letitia James, who is leading the fight against the giant bank, explained in a statement exactly what’s going on. She said, “The lawsuit alleges that Citi does not implement strong online protections to stop unauthorized account takeovers, misleads account holders about their rights after their accounts are hacked and funds are stolen and illegally denies reimbursement to victims of fraud.”

New York AG James has several local plaintiffs in the lawsuit, each of whom has a horrific story about how they lost their savings and how their bank, Citi, did absolutely nothing to help.

James’ office explained that after the scam, “For weeks, the customer continued to contact the bank and submit affidavits, but in the end, she was told that her fraud claim was denied.”

These hackers have many ways to steal money directly from a bank account, but the most common way is by calling a customer and pretending to be a customer service representative.

They then tell the customer that their money is in jeopardy of being stolen by a cyber hacker and prompt them to provide all of their personal sign-in information and other guarded details so that they can “protect” their money. Of course, with this information, criminals can then access the accounts and wire transfer the contents to their own accounts in seconds.

But the bank is claiming that legally, they are not required to refund or even assist customers in getting their stolen money back. Citibank explained in a statement, “Banks are not required to make clients whole when those clients follow criminals’ instructions, and banks can see no indication the clients are being deceived.”

Within the lawsuit, the attorney general quotes Regulation E, a federal statute that ensures American consumers are protected from illegal and unauthorized transactions, including ATM withdrawals, direct deposits, and, she argues, wire transfers. 

According to the AG’s office, “Defendant Citi has not deployed sufficiently robust data security measures to protect consumer financial accounts, respond appropriately to red flags, or limit theft by scam. Instead, Citi has overpromised and under-delivered on security, reacted ineffectively to fraud alerts, misled consumers, and summarily denied their claims. Citi’s illegal and deceptive practices have cost New Yorkers millions.”

James said in a statement, “Many New Yorkers rely on online banking to pay bills or save for big milestones, and if a bank cannot secure its customers’ accounts, they are failing in their most basic duty.”

That means that if AG James wins her case, Citibank will likely have to pay millions of dollars in restitution to its many customers who had their money stolen. However, in a case like this, that would only be the beginning. If James wins, many more lawsuits against Citi and other banks will likely be filed all over the country.

America will certainly be watching as this case goes to court, and almost every single person, with the exception of bank executives, will be hoping that the judge sides with the plaintiffs and forces these institutions to protect their customers.