EU countries agree on better consumer protection in online payments

Brussels (dpa) – European Union countries on Wednesday agreed new rules to improve payment services in the bloc by reducing fraud, promoting innovation, better protecting consumers and making fees more transparent.

“Consumers deserve a fraud-resistant, transparent and safe payment services environment,” said Polish Finance Minister Andrzej Domanski. “At the same time, we need to encourage innovation in the sector. These new rules will deliver on both fronts.”

The new rules must go to the European Parliament for final approval.

Payment providers will be obliged to share fraud-related information and put in place a system in which international banking numbers (IBAN) can be checked against an account name before money is transferred to the account.

The proposals aim for a comprehensive anti-fraud framework to tackle new forms of payment scams, such as “spoofing fraud,” when a fraudster pretends to be a customer’s payment service provider to trick the user into carrying out financial actions.

Heiner Herkenhoff, head of the German banking association (BdB), said: “Fraud can only be effectively combatted if all those involved – banks, telecoms providers and internet platforms – do their part. The legal framework also has to reflect this.”

Germany’s banks are critical of a proposal to make banks solely liable when customers are defrauded.

“Unilateral liability will not solve the fraud problem, but merely shift the financial consequences,” Herkenhoff said.

The result would be increased incentives for fraudsters, he predicted.

EU member states are also aiming for greater transparency in ATM transactions, with all fees and exchange rates to be shown with a transaction.

The same applies for payment card schemes, to allow consumers and businesses to make better choices. (June 18)