Citigroup Fails to Dismiss Lawsuit Accusing Citibank of Failing to Protect Customers from Online Scams
New York Attorney General Letitia James filed a lawsuit against Citigroup, accusing Citibank of violating a federal law concerning unauthorized wire transfers. Judge Paul Oetken in Manhattan denied Citigroup's request to dismiss the lawsuit, allowing James' claim to proceed.
James alleges that Citibank's security systems failed to identify and investigate warning signs, such as unrecognized devices and changes in user credentials and passwords. Consequently, this lack of investigation enabled scammers to steal millions of dollars from unsuspecting customers.
While the judge dismissed some claims due to federal law preemption, Citigroup must still face the federal wire transfer violation claim and portions of three other claims.