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With online fraud increasing, a member of the European Parliament (MEP) has called on the European Commission to strengthen consumer protection measures and enhance the security of digital transactions.
Dimitris Tsiodras submitted a question to the commission urging the EU to take action on online fraud in the trading bloc.
“Quite a number of EU citizens have fallen prey to organised cybercriminals who use email and social media phishing techniques to scam people by getting them to reveal their PIN codes,” said Tsiodras.
The Greek MEP, who hails from the centre-right European People’s Party, added that “the ability to make instant payments at the tap of a finger, combined with the use of artificial intelligence, increase the risk of fraud and identity fraud through voice cloning and deepfake videos aimed at scamming people and getting them to transfer funds to another account”.
The scale of the problem is substantial, with fraud across major payment instruments in the EEA estimated by the European Central Bank (ECB) and the European Banking Authority (EBA) to have been worth €4.3bn in 2023.
Tsiodras asked the commission how it plans to adapt to emerging fraud threats, enhance technological fraud detection and promote cooperation between financial institutions, telecom operators and digital platforms.
The MEP also asked whether the EU is considering creating a dedicated platform for service providers and authorities to share fraud-related information and coordinate responses to cross-border scams.
All change in European payments
Tsiodras’ intervention comes as the EU revises its payment services oversight via the incoming Payment Services Regulation (PSR) and revised Payment Services Directive (PSD3).
The European Parliament’s current position on the PSR emphasises stronger liability provisions for payment service providers (PSPs) in cases where authorised credit transfers fail due to errors or malfunctioning fraud detection services.
In their position, which was established in Spring 2024 prior to the European Parliament elections, MEPs pushed for stronger consumer protection against social engineering fraud, such as spoofing and impersonation scams.
They also conceded that, considering the evolving fraud landscape, the distinction between authorised and unauthorised transactions, as outlined in the previous Payment Services Directive (PSD2), is no longer sufficient.
As part of their position, MEPs have said that telecom companies and online platforms must cooperate with PSPs to counter fraudulent activities, and that if they fail to do so, they should share liability in fraud cases.
The MEPs’ stance on the legislation suggests that online platforms have a duty to safeguard service security and should actively participate in preventing spoofing fraud, suggesting that they should be found liable if they fail to implement adequate protective measures.
