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Nordic banks have warned the European Commission of the potential exacerbation of fraud risks under new EU regulations, citing proposed changes to payment service provider liability and advocating for stricter oversight of telecom companies and intensified efforts to combat fraud on social media platforms.
The banking associations of Sweden, Norway, Denmark and Finland have expressed serious concerns to John Berrigan, director-general of the European Commission's financial services directorate, regarding new EU regulations they believe could exacerbate fraud risks.
In their letter, the banks warn that proposed changes to payment service provider liability for impersonation fraud could support criminal activity and make EU citizens more vulnerable.
“The Nordic banking associations would like to underline the need to strike the right balance between, on the one hand, immediate availability to payment and transaction services, and, on the other hand, the protecting of the safety of the customer,” the letter reads.
Within, they argue that easy refunds for authorised transactions might lead to less vigilance among users and an increase in “friendly fraud”, whereby users falsely claim to be victims.
The banks have also called for stricter regulation and oversight of telecommunications companies, highlighting the growing number of fraud cases involving "spoofed" calls and malicious messages.
They suggest adopting successful models like Finland's, where tighter telecom regulations have blocked millions of fraudulent calls.
Regulators should require social media platforms to do more to eliminate fake accounts and misleading ads, the letter says, noting that “social media platforms have become fertile ground for financial crimes, facilitated by the prevalence of fake profiles and deceptive advertisements.”
The letter also offers its endorsement of ongoing EU investigations under the Digital Services Act aimed at combating deceptive online practices.
The industry groups advocate for enhanced data sharing among financial and non-financial stakeholders, proposing an EU-wide network to track and prevent fraud more effectively, while ensuring data security and privacy.
Public awareness campaigns are also emphasised, with the banks suggesting that successful initiatives in Nordic countries be expanded EU-wide to educate the public on fraud tactics.
Highlighting the need for stronger international judicial cooperation, the banks call on the EU to facilitate partnerships with third countries to combat organised fraud, often perpetrated by EU citizens operating from abroad, and also suggest increased involvement from Eurojust.
The banks have also used the letter to throw their support behind the European Banking Federation's concerns over the definition of authorisation in the Payment Services Regulation, warning that introducing subjective elements could create legal uncertainty and undermine the established liability framework.
“We hope that our experience as frontrunner digitalised economies will serve as an example of the need to safeguard this balance,” the letter says.
“The Nordic Banking associations stand ready to continue the dialogue on these matters and convey our experiences, as well as counteractions. We are convinced that these crimes are best fought with awareness and the right legal framework, especially with a close cooperation between the regulators, the law enforcement authorities and the industry.”
