The court found Citibank misapplied the law to avoid reimbursing customer losses. Credit: DW labs Incorporated/Shutterstock.

New York Attorney General Letitia James has announced a court victory allowing her lawsuit against Citibank to proceed, as a judge denied the bank’s motion to dismiss key claims.

The lawsuit alleges that Citibank did not adequately protect customers from fraud or reimburse victims as required by law.

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Judge Paul Oetken of the Southern District of New York ruled that the case regarding Citibank’s application of the Electronic Fund Transfer Act (EFTA) to unauthorised wire transfers will proceed, according to James.

James said: “When New Yorkers deposit their money in a bank, they expect it to be kept safe from scammers and thieves.

“Citi’s failures to protect its customers’ accounts are costing New Yorkers millions of dollars. Today’s decision will allow us to continue our case against Citi to help those whose savings were stolen and ensure the bank follows the law to protect its customers.”

In January 2024, James initiated legal action against Citibank for its alleged failure in safeguarding consumers from fraud.

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The lawsuit claims that due to weak data security and insufficient anti-breach measures, New Yorkers have suffered significant financial losses to scammers.

Despite the bank’s obligation to reimburse these losses, the court found that Citibank incorrectly applied the law to evade its responsibilities to customers.

The legal challenge seeks to halt Citibank’s alleged deceptive practices and secure restitution for those denied reimbursement over the past six years. Additionally, it aims to impose penalties and disgorgement on the bank.

Assistant Attorney General Chris Filburn with the Consumer Frauds and Protection Bureau is handling the matter.

The bureau, led by Jane Azia and Laura Levine, is part of the Division of Economic Justice, headed by Chris D’Angelo and Jennifer Levy.