New York City
AI Assisted Icon
Published on January 22, 2025
New York Attorney General's Lawsuit Against Citibank Proceeds After Judge Denies DismissalSource: Google Street View

In a legal showdown that has implications for consumer protections, New York Attorney General Letitia James has successfully fended off an attempt by Citibank to dismiss a lawsuit accusing the banking giant of inadequate safeguards against fraud. District Judge Paul Oetken upheld the core claims of the Office of the Attorney General's (OAG) case, clearing the path for the state to continue to pursue its allegations that Citi failed to properly reimburse and shield victims after their accounts were compromised. The ruling, particularly significant in the context of electronic transactions, highlights the applicability of the Electronic Fund Transfer Act (EFTA) in incidents of unauthorized wire transfers.

Attorney General James has been closely monitoring the situation, which has seen widespread ramifications on Citi's customer base. Noting the significance of the court's decision, James stated, "When New Yorkers deposit their money in a bank, they expect it to be kept safe from scammers and thieves," in a statement obtained by the New York Attorney General's Office. She went on to emphasize Citi's alleged lapses in their duty to protect consumers, asserting that these failures have cost New Yorkers millions. The lawsuit initiated by James in January 2024, accuses Citi of inadequately responding to fraud claims and neglecting to implement stringent security measures to preempt breaches.

The OAG is spearheading efforts to potentially secure restitution for Citi customers who were denied reimbursements, in addition to seeking further penalties and disgorgement from the bank. This ongoing legal battle underscores the heightened scrutiny financial institutions now face over their responsibility to combat fraud and safeguard consumer finances—a stance bolstered by recent judgements that reinforce consumer protection laws. The OAG team, managed by Assistant Attorney General Chris Filburn, Bureau Chief Jane Azia, and Deputy Bureau Chief Laura Levine, is operating within the framework of the Consumer Frauds and Protection Bureau, a subdivision of the Economic Justice Division.