EU member states and the European Parliament have agreed new rules designed to better protect online users against fraud, hidden fees and data leaks.
The rules make banks and other payment service providers liable for covering customers’ losses if they fail to implement appropriate fraud-prevention tools, while they must also halt suspicious transactions.
In a move that has been criticised by tech companies, the rules also extend a portion of responsibility for fraud to online platforms such as social media companies, obliging them to remove fraudulent ads.
‘Seismic shift’
Companies that fail to do so are to be liable for payments that payment providers make to customers reimbursing them for related fraud.
MEP Regina Doherty described the rules as a “seismic shift in accountability” for the largest online platforms, which she said have “profited from misery”.
“If you knowingly host fraud, if you look the other way, you will be held to account,” she said.
The Computer & Communications Industry Association (CCIA Europe), which represents tech companies, said the rules set a “dangerous precedent”.
Customer protection
The legislation should also give more clarity on payment charges, make it easier for payment providers to receive information from banks, and would force banks to ensure customers’ access to human care and not limit it to chatbots.
The European Parliament and member states must still adopt the provisional rules before they come into effect.
