European Court of Justice ruling on card misuse: reimbursement only if reported to the bank in good time
In its latest ruling, the European Court of Justice clarifies that consumers must report unauthorized payment transactions to the bank without intentional or grossly negligent delay in order not to lose their right to a refund, even if the statutory reporting period of 13 months has not yet expired (ruling of August 1, 2025, C-665/23). In this article, attorney Sascha C. Fürstenow explains what the ruling means for consumers.
Initial proceedings
The European Court of Justice heard a legal dispute from France between a consumer and the company Veracash. The consumer, who held a gold deposit account with Veracash, was sent a new card for withdrawals and payments in March 2017. Between March and May 2017, daily withdrawals were made from his account. However, after two months, the consumer claimed that he had never received the payment card and had never authorized these payments, and demanded refunds from his payment service provider. The two lower courts rejected the refund request on the grounds that he had not reported the account movements “immediately,” even though the report was made within the statutory period. In response to the customer’s appeal, the Court of Cassation referred questions of interpretation regarding the EU Payment Services Directive to the European Court of Justice, in particular whether there is a right to reimbursement for an unauthorized payment transaction if the notification is made within the statutory period of 13 months but was not reported to the bank immediately.
European Court of Justice: Immediate notification to the bank is mandatory
The European Court of Justice emphasizes that the obligation to report must be fulfilled both immediately and within the 13-month period. If a bank customer discovers unauthorized or incorrectly executed payment transactions, they must report them to the bank immediately. According to the European Court of Justice, there is a difference between the obligation to notify immediately and the objective 13-month period. The subjective obligation to notify “immediately” is intended to minimize the risks and consequences of unauthorized payment transactions.
These deadlines are crucial for consumers
The 13-month period
The statutory period of 13 months allows consumers to assert their claims for reimbursement of unauthorized or incorrect payment transactions against the bank within this period. After this period has expired, the consumer loses the right to reimbursement.
Immediate notification
In addition to the objective 13-month deadline, there is an independent obligation to report unauthorized payment transactions to the bank immediately, i.e., without culpable delay. The obligation to report immediately applies from the day on which the consumer becomes aware of the payment transactions.
This means that compliance with the 13-month period is not sufficient to establish a claim if the consumer is aware of the card misuse but delays reporting it even within the statutory period.
Intent and gross negligence
The European Court of Justice also emphasizes that consumers only lose their right to reimbursement if they delay reporting the incident intentionally or through gross negligence, i.e., if they act with fraudulent intent. In this sense, intent means that the consumer deliberately and intentionally delayed reporting the fraud, whereas gross negligence occurs when the delayed reporting constitutes a particularly serious breach of the duty of care.
Who bears the burden of proof?
According to the European Court of Justice, the burden of proof lies with the payment service provider, who must prove that the payment transaction was actually authenticated, properly recorded, and booked. This rule is intended to ensure that the consumer does not bear any further financial consequences.
What happens if several unauthorized payment transactions have been made?
As in this case, as in many practical cases, card thefts involve not just one but several withdrawals. If several unauthorized payment transactions occur in succession, the question arises as to how this should be handled. In short, the following applies: Even if the bank is notified at a later date, consumers do not automatically lose their right to reimbursement for all further debits, but only for those payments for which the notification was deliberately or grossly negligently delayed.
What consumers can do
The European Court of Justice ruling once again makes it clear that consumers must act independently and actively in the event of card fraud, according to attorney Fürstenow.
Account movements
In order to be able to report unauthorized or incorrect withdrawals in good time, it is recommended that account statements be checked regularly.
Evidence
Account statements, emails, or relevant documents should be kept in order to be able to prove any suspicious transactions.
Act immediately
If a suspicious transaction or withdrawal is noticed, this should be reported to the payment service provider without delay. Immediate notification determines whether the claim for reimbursement can be guaranteed.
The legal advice was prepared by Ms. Dastan, an employee of the FÜRSTENOW law firm, and professionally reviewed and finalized by Attorney Fürstenow.