Norwegian banks warned over 'illegal' withholding of funds from fraud victims
Norwegian banks have been told to take immediate action as they often break regulations by not reimbursing the victims of fraud enough, the Norwegian Consumer Ombudsman said Wednesday.
Letters have been sent to all Norwegian banks demanding they take immediate action to ensure that their customers' rights are safeguarded, the Norwegian Consumer Ombudsman (Forbrukertilsynet) announced Wednesday.
The Norwegian Consumer Ombudsman said it had sent the letters as it believes banks are not doing a good enough job of returning stolen funds to the victims of fraud, and that in some cases financial institutions were breaking the law.
"The Norwegian Consumer Ombudsman takes a serious view of the practice of Norwegian banks where they themselves decide whether the customer is responsible for the loss when the customer's bank account is misused," the report said.
When banks receive a complaint from customers, they have two choices. The first is to refund the amount the customer has complained about, with the bank implementing a deductible from the customer of 1,200 kroner (450 from 2023). Or the bank can keep more than the 1,200 kroner deductible, with the case being brought before Financial Complaints Board.
Instead, the Norwegian Consumer Protection Authority said banks often return nothing to the customer because the customer has "acted grossly negligently". An example of this reasoning banks use would be storing card information on certain websites. That, or banks were only willing to refund parts of losses over 12,000 kroner.
Additionally, banks are reportedly wrongly telling customers that they must take cases to the Financial Appeals Board. This is the banks' responsibility. The customer's only responsibility is to flag-up the fraud.
"The practice many banks now carry out, with both incorrect information to customers and illegal withholding of the customer's funds, is unacceptable," Trond Rønningen, CEO of the Norwegian Consumer Protection Authority, said
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Letters have been sent to all Norwegian banks demanding they take immediate action to ensure that their customers' rights are safeguarded, the Norwegian Consumer Ombudsman (Forbrukertilsynet) announced Wednesday.
The Norwegian Consumer Ombudsman said it had sent the letters as it believes banks are not doing a good enough job of returning stolen funds to the victims of fraud, and that in some cases financial institutions were breaking the law.
"The Norwegian Consumer Ombudsman takes a serious view of the practice of Norwegian banks where they themselves decide whether the customer is responsible for the loss when the customer's bank account is misused," the report said.
When banks receive a complaint from customers, they have two choices. The first is to refund the amount the customer has complained about, with the bank implementing a deductible from the customer of 1,200 kroner (450 from 2023). Or the bank can keep more than the 1,200 kroner deductible, with the case being brought before Financial Complaints Board.
Instead, the Norwegian Consumer Protection Authority said banks often return nothing to the customer because the customer has "acted grossly negligently". An example of this reasoning banks use would be storing card information on certain websites. That, or banks were only willing to refund parts of losses over 12,000 kroner.
Additionally, banks are reportedly wrongly telling customers that they must take cases to the Financial Appeals Board. This is the banks' responsibility. The customer's only responsibility is to flag-up the fraud.
"The practice many banks now carry out, with both incorrect information to customers and illegal withholding of the customer's funds, is unacceptable," Trond Rønningen, CEO of the Norwegian Consumer Protection Authority, said
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