A tiny finance company that claims its name is being used illegally by Citigroup Inc. filed suit against the banking giant Tuesday, asking for $125 million in damages.

The suit, filed by City Financial Inc. in U.S. District Court in Santa Ana, Calif., charges Citigroup with trademark infringement, unfair competition, and false advertising. City Financial, based in Orange, Calif., says Citigroup is using the brand name "CitiFinancial" even though it was denied permission to do so earlier this year.

City Financial has owned a California trademark on its name since 1992. The company says Citigroup came to it in February, asking that it be allowed to use the CitiFinancial name for its consumer lending division. Larry Rose, president of City Financial, said he refused.

"The City Financial trademark belongs exclusively to us," Mr. Rose said in a statement. "Under no circumstances would we allow anyone else to use our name."

A spokeswoman for Citigroup said the company has not yet seen the suit, and declined to comment on it.

City Financial said it discovered Citigroup was using CitiFinancial without its permission in September, when it began to receive calls from confused customers. After exchanging letters for about a month, the two sides met to discuss the matter on Oct. 18. At the meeting, according to City Financial, Citigroup refused to change the name of its division.

Shortly after, Mr. Rose said his company decided to sue. "We were appalled to discover that Citigroup had ignored our refusal and was deliberately using a name essentially identical to our 'City Financial' name," he said. "Healthy competition is one thing, but we do not appreciate being railroaded by anyone."

City Financial, founded in 1948, makes real estate secured consumer loans. Since 1978, it has made more than $150 million of loans in California. The company is being represented in this case by William E. Levin, a Laguna Beach, Calif., attorney.

The plaintiff said it expects a judge to be assigned to the case sometime this week.

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