(Reuters) – Citigroup lawyers urged U.S. District Judge Paul Oetken to dismiss a lawsuit filed in January by Attorney General Letitia James, which accuses the Citibank unit of failing to compensate customers who fall victim to online scammers, Bloomberg News reported on Tuesday.
The report added that the lawyers said that the bank has strong and extensive procedures to protect customers from fraud for making fraudulent transfers.
James, the New York state attorney general, sued the Citibank unit in January, alleging that its lax security protocols allowed fraudsters to easily access users’ accounts and steal their deposits through unauthorized wire transfers.
It stated that City’s “negligence” had cost customers in the state millions of dollars.
The Bloomberg report added that Citi said US banks would have to make a “fundamental shift” in how they process electronic payments if New York state wins the lawsuit.
Citibank urged a federal judge in April to dismiss the lawsuit, saying the appropriate standard of the Uniform Commercial Code, used by all US states, exempts banks from covering losses if they adopt in good faith commercially reasonable security measures to verify customer identities.
The offices of Citigroup and James did not immediately respond to Reuters’ requests for comment.