Bank of Russia Proposed Introduction of Mandatory Refund to Fraud Victims

To improve the mechanism for the return of funds stolen from citizens, the Bank of Russia plans to determine the amount of money that banks will have to pay to individual customers who have become victims of fraud, which follows from the materials of the Central Bank prepared on behalf of its Director of the Information Security Department Vadim Uvarov. 

In accordance with the text of amendments to the law on the national payment system, it is planned to introduce a simplified procedure for returning money to victims of financial fraud in the amount determined by the Bank of Russia. In such a case, a customer will have to notify the bank of fraud no later than the next day after receiving a notification from the credit institution about the transaction.

It is specified that the amount of money for the refund will be calculated “based on the targeted return of funds to citizens in an average of 80-90 per cent of all cases of social engineering.” The refund within the established amount applies to all banks, but if a bank has a low level of anti-fraud mechanism, it will have to return to a client the entire stolen amount of money, even if it exceeds the determined amount. This includes the cases when banks cannot identify transactions made without a client’s consent, despite receiving the necessary information from the Central Bank about fraudulent transactions.

In addition, the regulator proposes to give banks the right to write off money after one or two working days if there are signs of fraudulent actions, even despite a consent of a client.

“As a rule, in two days a client realizes that the money is being transferred to a fraudster, he has the opportunity to reject the transfer,” the Bank of Russia states.

It is proposed to extend the obligation to check transactions for signs of fraud, including reconciliation with the database of transfers without the consent of a client, not only to the bank of the initiator of the transfer or payment, but also to the bank of the recipient of the money.

The regulator also proposes to give banks the right to block spending transactions on the account of a recipient of funds for five working days, information about which is contained in the database on cases and attempts to transfer money without the consent of a client.

“The specified period is necessary for the victim client, law enforcement agencies to apply to the court to obtain a legal basis for the further seizure of funds and to obtain a court decision on the refund of money,” as explained in the materials of the Central Bank.

It is reminded that the fact that the Central Bank plans to improve the mechanism for the return of funds stolen by fraudsters from citizens was announced in early December during the forum AntiFraud Russia 2021. The effectiveness of the amendments to the existing law was planned to achieve through the operational interaction of the Ministry of Internal Affairs with the Bank of Russia, using the automated incident handling system of the regulator.

Ru-Main, 06.12.2021 
Source: RBC 

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