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Citigroup Sued for Mishandling of Online Scams: Banks will not protect you

January 30, 2024
min read
A Citibank skyscraper with a cloudy sky backdrop

The Wall Street Journal Report

In a significant development reported by Justin Baer and Dean Seal of the Wall Street Journal on January 30th, 2024, Citigroup faces legal challenges over its handling of online scams. The suit emphasizes the lack of care and liability banks hold for scams.

Background of the Lawsuit

According to the Wall Street Journal, New York Attorney General Letitia James has initiated a lawsuit against a unit of Citigroup. The allegations are severe: Citigroup failed to protect its customers from online scams and subsequently denied them reimbursements.

The Nature of Consumer Losses

The article highlights the plight of consumers who lost significant amounts of money, sometimes tens of thousands of dollars, due to what seems to be Citigroup's inadequate security measures. In one reported instance, a customer lost $40,000 after clicking a deceptive link that appeared to be from Citibank.

Citigroup's Alleged Security Failures

The lawsuit, as described by the Wall Street Journal, argues that Citibank did not have robust security protocols in place. This lack of security led to scammers infiltrating customer accounts and executing fraudulent wire transfers. Citi failed to detect and warn their customers of these fraudulent activities until it was too late.

Customer Experiences at Branches

Another concerning aspect reported is the alleged conduct of Citibank's employees at branches. Customers seeking assistance were reportedly coerced into completing affidavits, which were then used against them, leading to the denial of reimbursement claims.

Citigroup's Stance

Responding to the allegations, a Citigroup spokesman stated that the bank adheres to all relevant laws and regulations regarding wire transfers. They also noted that banks are not responsible for compensating clients who unknowingly follow criminal instructions when there's no apparent deception.

Legal and Consumer Implications

This case, as the Wall Street Journal points out, pivots on the interpretation of the Electronic Fund Transfer Act, concerning the rights and liabilities of consumers and financial institutions in electronic fund transfers. Attorney General James is pushing for Citigroup to not only reimburse defrauded customers but also to pay fines and enhance its anti-fraud defenses.

Catch's Role and Mission

In light of these developments, Catch reiterates its commitment to educating and supporting scam victims. Understanding the legal and financial complexities of such cases, Catch offers resources and guidance to help affected individuals navigate their situations effectively and protect themselves going forward.


The legal battle against Citigroup, as reported by the Wall Street Journal, underscores the ongoing risks of online scams and the importance of robust consumer protection. Catch stands as a vital resource in this scenario, offering education, tech solutions, and support to those targeted by scams, and reinforces the need for vigilance and proactive measures in the digital finance arena.

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