12 Dec

European Union: Agreement on new rules to fight non cash payment fraud

The EU is stepping up the fight against fraud involving non-cash means of payment (credit cards, online shopping, etc.) by upgrading and modernising the existing rules.

The European Council and Parliament negotiators reached yesterday (11 December) an agreement on the directive on combating fraud and counterfeiting of non-cash means of payment. This provisional political agreement will now have to be confirmed by the two institutions.

The directive updates the existing rules to ensure that a clear, robust and technology-neutral legal framework is in place. It also gets ride of operational obstacles that hamper investigation and prosecution, and foresees actions to enhance public awareness of fraudulent techniques such as phishing or skimming.

Josef Moser, minister of justice of Austria, has remarked that “fraud with credit cards or online shopping is on the increase. It undermines trust, and makes consumers more reluctant to shop online. Moreover, the proceeds from this sort of fraud are used to finance criminal groups. Today’s agreement is a step towards closing legal loopholes between member states and introducing common rules that will ensure that fraud does not go unpunished”.

Main elements of the text

The directive is technology-neutral and will encompass not only traditional non-cash payments such as bank cards or cheques but also new ways of making payment which have appeared over recent years, such as electronic wallets, mobile payments and virtual currencies.

The compromise text agreed includes provisions on:

-Expanding the scope of the offences to include, for example, transactions through virtual currencies;

-Harmonising the definitions of some online crime offences, such as hacking a victim’s computer or phishing;

-Harmonised rules on penalties for natural persons: Council and Parliament agreed minimum penalties ranging from 1 to 5 years depending of the type of offence;

-Assistance and support to ensure victims are sufficiently informed of their rights and citizens are advised on how to protect themselves from such frauds;

-Clarification of the scope of jurisdiction to ensure cross border frauds is tackled more effectively;

-Collection of statistics on, as a minimum, the number of offences and the number of persons prosecuted and convicted

The directive provides for minimum rules, so member states are free to go further and implement more stringent rules, including a broader definition of offences or higher penalties.

Next steps

Once the two institutions have confirmed the agreement reached, it will be reviewed by lawyer linguists before formal adoption by Council and Parliament before the end of the parliamentary term.

By: Estela Martín

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