Advocate General calls for reforming payment regulations to require banks to compensate fraud victims first before investigating disputes.
The European Union's Advocate General is recommending changes to banking regulations that would require financial institutions to refund cybercrime victims immediately, before conducting investigations. The proposal targets reforms to the Payment Services Directive 2 (PSD2), which currently governs how banks handle fraud compensation across EU member states.
The recommendation comes as cybercrime losses continue mounting across Europe, with victims often waiting weeks or months for reimbursement while banks investigate disputed transactions. Current PSD2 rules allow banks to delay compensation pending fraud investigations, leaving consumers financially vulnerable during lengthy dispute processes.
While specific loss figures weren't provided in available reporting, the push for regulatory reform suggests cybercrime compensation delays have become a significant consumer protection issue. The Advocate General's opinion could influence how the European Court of Justice ultimately rules on payment fraud liability.
If adopted, the changes would shift financial risk from consumers to banks during fraud investigations, potentially forcing institutions to strengthen fraud prevention systems. However, implementation would depend on formal court rulings and subsequent regulatory updates across EU member states.