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Fraud Involving Payment Methods in France: A 1.19 Billion Euro Loss and the Dispute Over Reimbursements

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Mahnoor Jehangir
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Fraud Involving Payment Methods in France: A 1.19 Billion Euro Loss and the Dispute Over Reimbursements

In 2022, France witnessed an alarming surge in fraud involving payment methods, culminating in losses totaling 1.19 billion euros. A significant portion of this loss, amounting to 464 million euros, was linked to card payments, and 313 million euros were tied to wire transfer fraud, which has seen a disturbing threefold increase in the past five years. The most common tactics employed by scammers include phishing and fake bank adviser calls.

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Victims, Reimbursements, and the Blame Game

While a majority of fraud victims, approximately two-thirds, receive reimbursements from their banks, some victims find themselves caught in a complex web of dispute and denial. These victims are often denied compensation under the allegation of negligence or complicity in the fraud. This issue frequently arises in cases of transactions authorized through two-factor authentication, where banks argue that the client's negligence is apparent.

Disputes and Strong Authentication

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However, instances have surfaced where clients allege coercion by scammers, leading to a contentious dispute. The Observatoire de la sécurité des moyens de paiement (OSMP) acknowledges a 'grey area' concerning reimbursements for fraud involving strong authentication and has made recommendations to clarify the situations in which banks should refund clients.

Recommendations and Future Measures

Notably, the OSMP advises that any transaction disputed by the account holder that did not involve strong authentication should be refunded no later than the end of the first business day following the dispute. Furthermore, while acknowledging the security of strong authentication, the OSMP emphasizes that it is not infallible and should not be relied upon as the sole reason to deny reimbursement of fraudulent transactions.

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