Consumer complaint received 2022-11-30
Product: Checking or savings account — Checking account
Issue: Managing an account — Banking errors
Company: CITIBANK, N.A. (DC)

On XX/XX/2022, my client, a Washington, D.C.-based small trade association , was victimized by an unauthorized electronic funds transfer ( " EFT '' ) of {$49000.00} from its Citibank checking account to an unknown Chinese  beneficiary : " XXXX XXXX  XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX This fraudulent access to a Citibank customer account falls within the definition of an unauthorized EFT under Regulation E, as the person or persons who initiated the unauthorized EFT had either stolen or hacked the access credentials from the accountholder. Moreover, Citibank had set up the checking account without even requiring or offering to set up routine multifactor or multiple approval protections to prevent a hacked or spoofed wire transfer. So no customer notification or transaction confirmation of the {$49000.00} wire was even sent by Citibank to the accountholder. Nor was any fraud protection monitoring in place at the time of the wire transfer despite all the red flags of an unusually large amount being sent to an obscure Chinese beneficiary. As a consequence, the accountholder was completely unaware of the wire transfer until reviewing its account statement the following month. 

On XX/XX/2022, Citibank became aware of fraudulent charges involving the accountholder 's debit card, and took action to freeze and cancel the debit card. Citibank also credited the debit card charges. Thus, if the debit card fraud is related to the unauthorized EFT on XX/XX/2022, Citibank should consistently credit the loss associated with the unauthorized EFT. Despite this fraudulent debit card activity, Citibank still took no action to inform its customer of the unauthorized EFT on XX/XX/2022, so that prompt actions could be taken to address it. 

On XX/XX/2022, the accountholder first discovered the XX/XX/2022 unauthorized EFT during a routine review of its account statement. It immediately reported the loss to its Citibank XXXX, MD XXXX. On XX/XX/2022, the accountholder at Citibank 's request executed an " Affidavit of Unauthorized Online Wire Transfer '' ( see attached document ). Citibank claims that on XX/XX/2022 that it attempted a wire recall of the XX/XX/2022 unauthorized EFT but it was unsuccessful given the 6 weeks that had elapsed since the transaction. 

On XX/XX/2022, the accountholder submitted a report ( # XXXX ) to the XXXX XXXX XXXX XXXX Police Department, including two wire payment summaries and a chronology. 

On XX/XX/2022, counsel for the accountholder submitted the enclosed demand letter to Citibank requesting that full reimbursement for the unauthorized EFT be made by Citibank. Citibank denied the fraud claim on XX/XX/2022 by letter stating only that its decision was based on " Our review, which determined the disputed transaction ( s ) was not fraudulent. '' Citibank opened a fraud claim appeal thereafter which was denied by a XX/XX/2022 letter ( belatedly received on XX/XX/2022 ), that stated : " No new information was received or discovered that would change the denial decision. ''