Banks are obliged to compensate phishing victims immediately for the losses they have suffered after a ruling in summary proceedings from a court up in Antwerp, daily Het Laatste Nieuws reports. Lawyer Geert Lenssens, who specialises in banking law, describes it as a “groundbreaking” precedent.
Home News
Court rules "banks must compensate phishing victims immediately"
Published:
The case centres on an elderly couple who were defrauded of just under 50,000 euros. The couple had transferred the money to a fake bank employee in Portugal. In such cases, banks usually refuse to refund the money, arguing customers are guilty of gross negligence by transferring the money to a fraudulent recipient themselves.
However, the judge up in Antwerp ruled against the bank in this case. Lawyer Geert Lenssens, who specialises in banking cases, explains why this could be a “groundbreaking” precedent.
To be clear, Lenssens is not involved in the case itself, but he is pleased that a judge has finally set the record straight. “The principle is simple. The bank is obliged to reimburse a customer who is a victim of phishing, unless the bank proves that the customer has committed a gross error.”
In practice, banks often refuse to compensate customers because they immediately assume that the customer has committed a gross error. But things need to change, the judge has now ruled. Banks must first compensate the customer, and if they believe there was gross negligence, they must take the matter to court themselves.
According to Lenssens, the latter will rarely happen. “A gross error is the big exception. If we were to look at all phishing cases, I think we’re talking about barely 1 per cent of all such cases. Because a gross error is different from a mistake: if, for example, you enter or hand over your code as a result of a scam, that is not a gross error.”
"Banks need to look at themselves"
Now that a judge has also adopted this reasoning, Lenssens assumes that this decision will have ‘major consequences’. "It is a provisional decision, but it is groundbreaking. When someone comes to me with a phishing case, I will immediately think of initiating summary proceedings. And I won’t be the only one. This will be used thousands of times in legal practice in the coming months and years."
Lenssens also hopes that this decision will serve as a wake-up call for the banks. "The banking world needs to take a long, hard look at itself. Enough is enough. We know they are dragging their feet and that they are, in fact, not respecting the law. Much has already been written about this, but now it is also stated in so many words in this ruling."