Citibank sued by New York over alleged failure to reimburse fraud victims

NEW YORK (Reuters) - New York state's attorney general's office said on Tuesday said it had sued Citibank for allegedly failing to protect customers from electronic fraud and reimburse victims, which it said had cost customers in the state millions of dollars.

In a lawsuit filed in Manhattan federal court, Attorney General Letitia James asked Citibank to disgorge profits, pay a $5,000 fine for each instance in which it violated the law, and appoint a third-party monitor to identify all customers who were harmed.

"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," James said in a statement.

The lawsuit alleges Citi's lax security protocols allowed scammers to gain easy access to users' accounts and steal their deposits.

(Reporting by Luc Cohen in New York; Editing by Chizu Nomiyama)