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Business InsiderDEC 6 2023
NY Sues Citibank for Allegedly Not Protecting Customers
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The Facts
New York Attorney General Letitia James announced Tuesday she's suing Citibank for allegedly failing to protect customer funds from online fraudsters and for not reimbursing victims who had thousands stolen from their accounts.
James filed the lawsuit at the US District Court for the Southern District of New York. It states that New York customers lost millions of dollars due to Citi’s weak security and anti-fraud measures, with some people losing their entire life savings.
In a statement, James’ office said Citi “fails to respond to fraudulent activity appropriately and quickly,” noting that the bank’s systems didn't adequately respond to red flags, including scammers who used unrecognized devices, accessed accounts from different locations, and changed account usernames and passwords.
The Spin
Narrative A
All banks must be held responsible when they don't protect their customers from scammers, and, in some instances, ignore fraud. In this case, CitiBank thinks a basic disclaimer against scams is enough to remove any liability for stolen customer funds, but that's not true. Security measures must be improved and customers must be reimbursed when they're victimized.
Narrative B
It's easy to just blame the banks in situations like this, but there are many factors at play. First and foremost, banks shouldn't be held liable in instances of customer negligence. Sometimes, banks should reimburse customers, but it's also incumbent on customers to be more careful because there are always going to be scammers trying to make a quick buck.