Michael McGrath (Cork South Central, Fianna Fail)
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This response presumes the reference to financial fraud is fraud that occurs through Payment Service Providers (PSPs). Payment services in Ireland are regulated by the Payment Services Directive(PSD2), which was transposed in Ireland as the European Union (Payment Services) Regulations 2018 (S.I. No. 6 of 2018). The Payment Services Regulations provide for refunds in the case of an unauthorised payment, requiring the PSP to refund the payer the amount of the unauthorised payment transaction immediately. However there is no such provision for authorised payment transactions.

A payer is also entitled to a refund from the PSP for an authorised payment transaction which was initiated by or through a payee and which has already been executed, where the authorisation both did not specify the exact amount of the payment transaction and the amount of the payment transaction exceeded the amount the payer could reasonably have expected.

On 28 June the European Commission issued the PSD2 Review, accompanied by a proposal for a Payment Services Regulation and a Payment Services Directive to replace the existing PSD2. The Commission considers that, with social engineering, the difference between authorised and non-authorised transactions is becoming more blurred and complex to apply in practice. This legislative package proposes to introduce additional refund rights for consumers beyond for unauthorised transactions e.g. a fraud where the fraudster pretends to be an employee of the consumer’s bank, for example using the bank’s telephone number or e-mail address (impersonation or spoofing).

The Deputy should be aware that I have just published the Terms of References for the National Payment Strategy, which will examine the issue of fraud nationally and measures to mitigate it. The Retail Banking Review contained a recommendation for the Department to lead on the development of a National Payments Strategy in 2024, developing a new strategy that will take account of the changing landscape and determine how best to adapt to it. The NPS will also take account of the EU legislative landscape, particularly the proposals on instant payments and payment services.

A key element of the work will be to examine and analyse the critical issue of payment fraud, ensuring that the legislative framework is there to help industry and central bank to combat fraud. While much of this is governed by EU legislation, it is important that the NPS examines and analyses payment fraud to see if it can identify further measures that could be taken to prevent fraud. In that regard, work on financial literacy is already underway within the Department, something that was set out in a separate recommendation of the Retail Banking Review.