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With yet another lawsuit for misconduct, consider dumping your big bank


Photo: Antonio Vernon

Citibank was charged Tuesday for failing to protect customers from fraud and for refusing to reimburse them.

A lawsuit by the New York Attorney General’s Office alleges that Citi doesn’t have strong online protections to stop unauthorized account takeovers, misleads customers about their rights after their accounts are hacked and funds are stolen, and illegally denies reimbursement to victims of fraud.

The agency also found that the bank fails to respond to fraudulent activity correctly and quickly.

As a result of Citi’s lax security, New York customers have lost millions of dollars, and in some instances, their entire lifesavings, to scammers and hackers, said New York Attorney General Letitia James.

“Banks are supposed to be the safest place to keep money, yet Citi’s negligence has allowed scammers to steal millions of dollars from hardworking people,” said James.

There is no excuse for Citi’s failure to protect and prevent millions of dollars from being stolen from customers’ accounts, she said.

One example: In October 2021, a New Yorker had $40,000 stolen from her retirement savings account after being tricked by a text message saying it was from Citi, but it was actually from a scammer. After changing her password, the scammer transferred her money, the agency said in a statement.

For weeks, the customer continued to contact the bank and submit affidavits, but in the end, she was told that her claim for fraud was denied.

Another New York resident lost $35,000 to a scammer who changed her online passwords and tried to transfer the money. While Citi initially tried to verify the wire transfer by calling the customer, who was working and didn’t see the call, the bank approved a second attempted wire transfer without getting the customer on the phone. She lost nearly everything she had saved, and Citi refused to reimburse her.

With this disregard for customer safety and refusal to reimburse them, Citi doesn’t deserve your business. As I’ve recommended for years, consider a local credit union instead of a big bank.


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