The Bank of Lithuania is strengthening its defense against financial fraud Business

“As the scale of financial fraud grows, so does the role of payment service providers in managing this threat – they are one of the most important lines of defense.” In the Guidelines, we have incorporated the experience we have gathered through inspections, dealing with consumer disputes and complaints. This is a practical guide that we’ve put together after evaluating both good and bad practices, which we hope will help limit the actions of fraudsters.

In addition to effective internal procedures and information technology solutions, it is very important for fraud prevention that financial institutions actively communicate with customers – publish warnings clearly and in a visible place, respond promptly to reports and complaints,” says Simonas Krėpšta, a member of the Board of the Bank of Lithuania.

With the recommendations and examples of good practice presented in the guidelines, the Bank of Lithuania aims to help payment service providers to be resistant to financial fraud, to use effective organizational and technical measures, to detect fraudsters’ attacks (including new schemes) in time, to respond promptly to them, and to properly manage the risks in this area .

The guidelines apply to licensed financial market participants providing payment services (banks, credit unions, electronic money and payment institutions), and will be constantly updated.

The Bank of Lithuania emphasizes that financial institutions should carefully assess all received complaints about possible fraud. Their detailed analysis could help to create profiles and typologies of fraudsters, which would allow better recognition and prevention of fraud.

It is recommended for payment service providers to use technological tools that would allow to effectively identify unusual customer behavior, monitor transactions both in real time and retrospectively, and identify unusual transactions for a specific customer. Fraud detection scenarios used by financial institutions should be updated periodically to reflect the latest known fraud trends.

It is very important that financial institutions ensure accessibility to customers outside of working hours, so that they can immediately report possible cases of fraud, have the ability to block not only the payment card, but also access to the payment account or cancel the payment transaction. Payment service providers should also promptly seek all possible ways to help the customer recover funds, inform about the course of action.

The Bank of Lithuania emphasizes the importance of financial literacy for fraud prevention – on their websites and social network accounts, payment service providers should inform customers about known fraud methods, signs of unreliable or fake websites, provide recommendations on how to protect yourself from possible fraud, what data can and should not be disclosed . The mentioned information should be relevant and constantly updated.

If payment service providers receive complaints about payment transactions, requests for refunds, it is extremely important that they examine all complaints about contested payment transactions individually, without prejudice, and make decisions after a detailed assessment of all the circumstances of the execution of a specific payment transaction.

In order to ensure that payment service providers understand and treat the provisions of the Guidelines in the same way, Bank of Lithuania š. m. May 23 organizes a consultation event on the practical aspects of the implementation of the Guidelines.