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The Bank of Lithuania is concerned about misunderstandings between financial institutions and customers, particularly regarding the cancellation and tracing of payment transactions, which often leads to complications in fraud cases.
In a new letter to payment service providers, the central bank urges financial institutions to improve transparency and responsiveness to protect customers more effectively.
Vaidas Cibas, director of the financial market supervision department at the Bank of Lithuania, stressed the importance of quick action.
“Financial institutions must promptly respond to customer requests to cancel payment transactions. By seeing the status of 'reserved funds,’ the customer hopes that the payment can still be cancelled, while the financial institution treats such a payment as completed,” he said.
“In this way, time is lost, which is one of the most important criteria in the case of fraud.”
Cibas added that it is important that there are no ambiguities. “Consumers should contact financial institutions immediately, and they should respond promptly.”
What does the new letter say?
The Bank of Lithuania has issued a letter with recommendations for financial institutions, detailing how they should handle requests to cancel or trace payment transactions and how to communicate with customers.
The letter highlights both good and bad practices currently observed among institutions.
Good practices include prioritising requests to cancel or trace transactions, offering 24/7 processing and allowing customers to monitor the status of their requests.
Bad practices, meanwhile, include processing requests only during business hours and burying crucial information in difficult-to-find sections of websites or agreements.
The regulator also recommends that financial institutions provide clear explanations of the term "reserved funds" and clarify whether these funds can be recovered.
According to the central bank, this information should be easily accessible, such as within online banking platforms or at the point of transaction.
In cases where customers are unsure which institution is responsible for their services, especially when intermediaries or electronic money distributors are involved, the Bank of Lithuania insists that financial institutions ensure that all parties involved are clearly identified and that communication is accurate and straightforward.
It says that the institutions are accountable for the actions of their partners and must ensure that customer complaints are handled directly and effectively.
