Banks fret over phishing rule

Lenders say cap of 1,000 euros per online transaction is imminent to contain their liability

Banks fret over phishing rule

Banks are ambivalent over the provision submitted to Parliament in a Development Ministry draft law about their liability regarding fraud in online transactions (phishing).

The regulation exempts banks from the obligation to compensate victims of electronic fraud for losses of more than 1,000 euros, if, as it states, the provider – i.e. the bank – proves that it “has and is implementing additional and more sophisticated transaction control mechanisms, on top of those applying to the strong identification of transactions.”

That provision also applies in cases where the card or account holder has shown gross negligence, such as revealing their card verification number, the password or the one-time password sent by the bank to approve a transaction.

Banks say they are ready to strengthen the security levels for online transactions with or without a card, in order to avoid compensating their customers for losses of more than €1,000 in cases of phishing.

However, as they explain, the fact that the legislative provision does not specifically define the form of these security levels will oblige banks to put a limit of €1,000 on banking transactions, in order to prevent massive embezzlement of amounts by astute people who will seek to exploit the gray zone that is created in the field of electronic transactions. Otherwise, as competent banking sources point out, the conditions will be created for mass legal appeals and claims by consumers who are victims of phishing.

Equally dangerous is the fact that these claims are likely to be raised with the certainty that the bank is responsible for compensation, a certainty that can dampen the reflexes of increased caution internet users should always use.

There have been numerous cases of electronic fraud, especially since the outbreak of the pandemic, which boosted internet and mobile banking transactions, introducing new users to electronic transactions, many of whom, such as older ones, were not familiar with online banking. 

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