Citigroup urges dismissal of 'misguided' New York lawsuit over fraud scams
© Reuters. FILE PHOTO: The logo for Citibank is seen on the trading floor at the New York Stock Exchange in Manhattan, New York City, U.S., August 3, 2021. REUTERS/Andrew Kelly/File PhotoNEW YORK - Citigroup on Tuesday urged a federal judge to dismiss New York Attorney General Letitia James' lawsuit accusing its Citibank unit of failing to reimburse customers who fall victim to online scammers.
Citigroup said the proper standard from the Uniform Commercial Code, which all U.S. states use, excuses banks from covering losses if in good faith they adopt commercially reasonable security measures to verify customer identities."No system will catch every scam every time," but the solution is not a lawsuit that would"abruptly and dramatically upset how banks have organized their policies and practices for decades," Citigroup said in a filing in Manhattan federal court.
In one instance, a customer allegedly lost $40,000 of retirement savings after clicking a link in a text message that appeared to be from Citibank. The attorney general wants Citibank to pay back defrauded New Yorkers, pay a $5,000 civil fine per violation, and appoint an outside monitor to review bank records and locate victims.
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