Citigroup Lawsuit Update

By Jaiveer Shekhawat
(Reuters) – Citigroup's lawyers have urged U.S. District Judge Paul Oetken to dismiss a suit filed in January by Attorney General Letitia James. The suit accuses Citibank of failing to reimburse customers who fall victim to online scammers, as a Citigroup spokesperson told Reuters on Tuesday.

The lawyers argued that the bank has robust procedures in place to protect consumers from being scammed into making fraudulent transfers.
"Citi closely follows all laws and regulations related to wire transfers and works extremely hard to prevent threats from affecting our clients and to assist them in recovering losses when possible," the spokesperson said.

James, New York state's attorney general, sued the Citibank unit in January, alleging that lax security protocols allowed scammers easy access to users' accounts and led to unauthorized wire transfers that stole customer deposits.

She claimed that "Citi's negligence" cost customers in the state millions of dollars.
In April, Citi urged a federal judge to dismiss the lawsuit, stating that the Uniform Commercial Code excuses banks from covering losses if they adopt commercially reasonable security measures in good faith to verify customer identities.

James' office did not immediately respond to Reuters' requests for comment.
Bloomberg News first reported the development earlier on Tuesday.