Changes in the payments market regulation induce favourable changes for consumers
Amendments to the Law on Payments coming into force today will strengthen the protection of consumer interests. They obligate market participants to pay more attention to payment security and assume a larger share of loss in the event of an incident.
‘The new provisions of the Law embed Europe’s good practices in the field of payment services in national law. Residents occurring in a situation which entails adverse consequences, say, upon making a mistake in the execution of a payment or being impacted by hackers will perceive an undoubted benefit. We expect that the higher responsibility for professional market participants will encourage the consumers to use electronic payment services with more confidence,’ says Marius Jurgilas, Member of the Board of the Bank of Lithuania.
The amount of loss to be covered by the consumer incurred due to the loss or theft of his payment card or due to the unauthorised use of his Internet banking passwords will from now on be three times lower – €50 (previously – €150). In some cases, e.g. in the event of unauthorised use of a contactless payment card, the consumer will face no loss whatsoever.
A bank or another payment service provider, upon learning about payment transactions executed without the consent of the customer, shall, no later than by the bank’s next business day, return the unauthorised transaction amount except in case of reasonable doubt as to the fairness of the customer’s actions or his particular negligence (e.g. revelation of his Internet banking passwords to fraudsters). Particular attention will now have to be given to strong customer authentication procedures, when the customer logs in to his account online or via other remote communication means. Payment service providers will also have to assess the eligibility of the security measures used and notify the Bank of Lithuania of any losses borne due to fraudulence.
It will require less effort for payers who have indicated the wrong account of the payee to recover the funds transferred to the wrong person. Payment service providers have been obligated to cooperate and exchange information on the wrong payments; hence the payees will not be able to hide behind the mask of confidentiality. In case of not recovering the money in a peaceful way, the payer will be provided all necessary information for the initiation of judicial proceedings.
Persons who use their payment cards to book various services (a hotel, car rental, etc.) in the European Union should know that service providers, being unaware of the final payment amount up-front, will only be able to reserve a specific amount for which the payer gave a consent, and will have to immediately annul the reservation upon receipt of precise information.
The amendments to the Law provide for more conducive conditions for the customers to close their payment accounts. They will be able to do this free of charge already six months after opening the account (previously – after 12 months). Moreover, once the customer decided to close his account, the payment service provider will have to submit free of charge a three-year statement of the account which might be helpful in the ascertainment of the soundness of payment transactions, as well as in the assessment of the person’s creditworthiness.
The Law on Payments has been amended with a view to implementing the European Union’s Second Payments Directive. Banks and other payment service providers shall provide payment services following the new provisions as of 1 August 2018.