NEW YORK ( TheStreet) -- Citigroup ( C) on Friday raised its estimate of possible legal losses to $5 billion from its previous estimate of $4 billion. The bank also highlighted new legal risks in its consumer business, in its annual 10-K filing with the Securities and Exchange Commission. Citigroup like other big banks continues to deal with legal liabilities arising out of its conduct heading into the mortgage crisis. In the fourth quarter, the company incurred higher-than-expected legal expenses to the tune of $1.3 billion. The management said the bank had reserved for possible legal losses related to its U.S. consumer business but did not provide further details. In the 10-K filing, the bank noted that certain of its consumer businesses including Citi branded and retail card business were marketing "add-on" services, including payment protection and identity monitoring. "These add-on products have been the subject of enforcement actions against other institutions by regulators, including the Consumer Financial Protection Bureau (CFPB), the OCC, and the FDIC, that have resulted in orders to pay restitution to customers and penalties in substantial amounts." Some state attorneys general have also been going after credit card lenders alleging improper marketing of credit protection services. Citi went on to say that "in light of the current regulatory focus on add-on products and the actions regulators have taken in relation to other credit card issuers, one or more regulators may order that Citi pay restitution to customers and/or impose penalties or other relief arising from Citi's marketing, distribution, or servicing of add-on products." Banks are required to estimate "reasonably possible" legal losses, meaning the chance of the future event or events occurring is more than remote but less than likely. These are expenses that the bank has not already reserved for and could potentially hurt earnings. Citigroup is in the midst of restructuring its businesses under new CEO Michael Corbat and recently announced that it will shed 11,000 jobs, shut branches and exit unprofitable markets. Shares of the bank were lower by 1% in premarket trading. -- Written by Shanthi Bharatwaj in New York. >To contact the writer of this article, click here: Shanthi Bharatwaj. >To follow the writer on Twitter, go to http://twitter.com/shavenk. >To submit a news tip, send an email to: firstname.lastname@example.org.