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A member of the European Parliament (MEP) is seeking amendments to the Payment Services Regulation, requiring stricter oversight for social media firms and others to crack down on payments fraud.

Marek Belka, the PSR’s rapporteur, has released his set of amendments to the regulation, a day after Ondrej Kovarik, the MEP responsible for the PSD3, released his.��

The standout element of Belka’s work is that he wants to bring “electronic communication services”, such as telecommunications and social media firms, into scope, which goes further than payments regulation has done so far.��

In the UK, the Payments Association, as well as key retail banks such as Lloyds and TSB, have long warned that fraud that takes place on their networks stems from social media.��

“Those electronic communications services should be obliged to cooperate with payment service providers in the fight against fraud,” said Belka’s amendment. “If they fail to do so, they should be held jointly responsible in the event of fraud.” 

This could ultimately mean that these firms come into scope for compensation.��

Belka has also tightened up the meaning of “gross negligence” and when customers fall foul of this, which will also be helpful to payment service providers (PSPs).��

In one amendment, Belka has said that customers who give an unlocked phone to a third party will be grossly negligent, and unable to be reimbursed. In an additional recital, meanwhile, Belka has said that the European Banking Authority (EBA) should issue guidelines on how the concept is to be interpreted for the purpose of the PSR, considering different definitions throughout the EU.��

Belka has also called for the EBA to set up a dedicated IT platform to exchange information on fraudulent accounts.

Another amendment, meanwhile, suggests that “where a payment service provider was informed beforehand of fraudulent behaviour by an account and does not block that account, it should cover the financial losses incurred by a payment service user that is a victim of such fraud”.

Further, Belka has said that member states should cooperate with PSPs and communication services providers to finance education campaigns targeted at citizens on how to detect payment fraud and how to avoid becoming a victim of payment-related fraudsters, and that this should be provided free of charge.

In an amendment to Recital 60, Belka has said that where account information service providers (AISPs) or payment initiation service providers (PISPs) decide to access a payment account without using the dedicated interface, they should afterwards inform the relevant competent authority and justify their decision.

This could further clamp down on fintechs' use of screen scraping, which one trade association warned causes contingency issues and could cause a discrepancy with the EU’s Digital Operational Resilience Act.��

Further, the amendments explicitly say that a PISP should benefit “only” from the information necessary to assess the risks of non-execution of the initiated transaction.��

Read about possible PSD3 amendments here.��