Heiner Herkenhoff, CEO of the Association of German Banks, which is this year’s coordinator of the German Banking Industry Committee (GBIC), said, “Fraud affects customers and the banking industry alike. The legislative requirements for fraud prevention must be improved for all providers involved. The European Union has now made great strides towards achieving this task.”

The new legislative framework will allow banks to go further in preventing losses from fraud. This includes, for example, possible responses where there is suspicion of fraud. In addition, the Council and Parliament have agreed to impose stricter liability rules on institutions in certain cases.

If customers fall victim to fraudsters through circumstances beyond the control of a credit institution, the institution is usually unable to detect or prevent such cases. Regrettably, this was repeatedly questioned throughout the legislative process. Against this background, the GBIC welcomes the agreement now reached, which refrains from imposing blanket liability for losses from all conceivable types of fraud. Customers are to be given particular protection in cases where the fraudsters claim to be employees of the bank. However, in addition to this particular type of fraud, the bank’s liability is to be based on the legally improved prevention options.

The GBIC also welcomes the increased inclusion of telecommunications companies and internet platforms in combating fraud. “Not all the details necessary for successful fraud prevention have been clarified yet. Viable and balanced regulations for banks and other service providers must be developed in the ongoing legislative process,” said Herkenhoff.