The meaning of gross negligence under the Payment Services Regulations

The European Communities (Payment Services) Regulations S.I. 383 of 2009 govern, among other things, liability for unauthorised payment transactions and the Financial Services Ombudsman has the task of adjudicating on any disputes that arise.

If a payment services user (customer) becomes aware of an unauthorised transaction within 13 months of its occurrence and duly notifies their payment services provider (bank) of the same, the regulations provide that the bank shall refund the customer. The bank will not be required to issue a refund if it can prove that the customer authorised the transaction, although the bank will generally not, in that regard, be solely permitted to rely on the fact that the transaction was so authenticated (for example, where a PIN is used without error).

The customer will, however, be liable for the first €75 (£62) in losses if the unauthorised transaction arose due to the payment instrument (for example debit card) being either lost or stolen or if the accompanying security features (for example PIN number/password) were not kept safe by the customer…

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