EU Court Orders Banks to Refund Fraud Victims Faster

The Court of Justice of the European Union ruled on October 15 that banks must immediately reimburse customers for unauthorized payment transactions, even if they believe the fraud was made possible by the account holder's gross negligence.

The ruling was issued in case C-70/25 Tukowiecka, concerning a customer of the Polish bank PKO BP. The court clarified the application of the European Payment Services Directive PSD2.

According to the ruling, the bank is obliged to refund the money without delay, but no later than the end of the next business day after detecting the unauthorized transaction or receiving notification of it. The customer also must report the suspicious transaction without undue delay.

An exception is provided only in cases where the bank has reasonable suspicions that the fraud was committed by the customer himself and notifies the competent state authority accordingly.

The basis for the proceedings was the case of a Polish resident who was selling goods on an online platform. A fraudster, posing as a buyer, sent her a link to a fake website that imitated the bank's page. The woman entered her online banking login credentials, after which approximately 3,000 zlotys (about 700 euros) were transferred from her account.

The next day, the victim contacted the bank, but it refused to refund the money. The financial institution considered that the customer had been grossly negligent by disclosing her banking data to third parties. Subsequently, the case went to a Polish court, which referred a question to the EU Court for clarification.

The European Court emphasized that the initial refund of funds and the final determination of liability for losses are separate legal issues. The bank must first reimburse the amount of the unauthorized transaction, but may later seek compensation from the customer if it proves that the losses arose from his intentional actions or gross negligence.

The burden of proving violations lies solely on the financial institution. The EU Court explained that a different approach would force victims to go to court themselves to recover the money, effectively depriving the requirement of immediate reimbursement of its purpose.

The ruling is relevant for bank account holders in EU countries, including Ukrainians who use the services of European banks. It applies specifically to unauthorized transactions, not all cases of money lost through fraud. The final decision in the case of the Polish customer must be made by the national court, taking into account the EU Court's clarification.

Sources: Court of Justice of the European Union, Rzeczpospolita.