NBC 5 Responds

‘They Don't Have My Back': Theft Victims Say Bank Blamed Them, Then Refused Refund

Two Citibank customers tell NBC 5 their money was stolen straight from their account and the bank blamed them for it. Both crimes involved a popular way to pay for things electronically.

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Having money stolen directly from your bank account can be stressful by itself, but two Citibank customers tell NBC 5 Responds that once that happened to them, their bank didn’t have their back.

They said the bank even blamed them for the crimes and initially refused to refund what was lost. 

Both Citibank cases involved thieves exploiting Zelle, one of the most popular peer-to-peer electronic payment options used in the U.S.

The topic of whether banks are federally required to refund customers who have funds stolen over Zelle is being discussed at some of the highest levels of Washington and the big banks themselves.

For Kathy Elwood out of Irving Park in Chicago, her trouble started last October when she received an email alert from Citibank flagging “suspicious activity” on her account: a Zelle transfer of $840.

“I thought, ‘Oh, this is a problem.’” Elwood said. “I thought, ‘A: I don’t know this person, and B: This is not anything I would do.’”

Elwood’s bank statement showed the name of the thief that the Zelle transfer went to, a person she had never heard of. She said she never uses Zelle and that she hadn’t shared her bank account information with anyone.

Elwood immediately filed a report with Chicago police and called Citibank’s Fraud Department to report the unauthorized transfer.

Since her bank is federally insured for these exact kinds of cases, Elwood said she assumed it would be an open-and-shut case. But that’s not what happened.

“I talked to Citibank and they told me what I needed,” Elwood said. “Then, they came back with the first letter saying that we're not going to, we're not going to refund you the money.”

More surprising than the denial letter was the bank’s reasoning for their denial, determining that her “Citibank Bank Online credentials were required to perform these transfers” and the “activity appears to be consistent with [Elwood’s] normal banking activities.”

This despite the fact that Elwood only learned about the fraudulent transfer when Citibank flagged it as “suspicious activity.”

Elwood said she pointed this out on five different occasions, filing claim after claim, but the bank wouldn’t budge on its decision, leaving Elwood with little options left. 

“I was angry,” Elwood said. “I mean, that's my mortgage payment. I thought, ‘I'm not going to let this go.’”

Elwood is not alone. 

Last month, NBC 5 Responds reported on what happened to Colin Johnson when he was the victim of a strong-armed robbery last year in Lakeview.

Banking records show thieves used Johnson’s stolen phone to transfer $10,000 over Zelle to themselves.

Johnson immediately called 911, and in the days that followed, he shared his police report with Citibank’s Fraud Department.

Much of 24-year-old Colin Johnson’s savings account was drained by thieves who used a popular banking app to do the damage; one that is now under fire by lawmakers.

Johnson’s refund claim was denied, too, and in Citibank’s denial letter, officials recommended that Johnson should “reach out to the recipient directly to resolve this matter.”

In other words, ask the thieves for his money back.

“I don't know where to begin,” Johnson said after reading the letter back to himself. “I don't know who this person is, I don't know where they live. Even if I did, I'm not going to show up to their door, knock, and demand my money back.”

A spokesperson for Citibank insisted that its employees are personally reviewing these refund and fraud claims, and that the bank is not employing any kind of artificial intelligence or computer programs to review these types of claims. 

But Citibank did not offer any kind of explanation as to why both Elwood and Johnson’s cases were denied, despite them each providing police reports of their crimes.

There is a growing list of bank customers who’ve complained that their banks did not support them after they fell victim to fraud transfers over Zelle.

In fact, the major banks that own Zelle, including banks using its services like Citibank, are facing pressure from lawmakers, who say federal standards already in place oblige banks to stand by their customers if they are the victims of most kinds of fraud, including fraud involving peer-to-peer payment options.

Zelle and its parent company, Early Warning Services, has told NBC 5 it’s just the messenger: Communicating money transfers from one bank to another, never actually holding the funds, and that only the banks involved can make those kinds of refund decisions.

After NBC 5 contacted Citibank about Elwood and Johnson’s refund claims, the bank reversed its decision and refunded both customers what they were owed.

In a statement, Citibank told NBC 5, “We have a great deal of sympathy for those who fall victim to fraud… While all fraud cases are different, we are pleased to have resolved this matter with our customer.”

Elwood is pleased with the result, but feels it shouldn’t have taken this long for Citibank to do the right thing.

“I learned that they don’t have my back,” Elwood said.

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