21 September 2017
visit www.avoka.com

EPC defends Sepa Direct Debits against consumer fraud allegations

04 March 2010  |  11369 views  |  0 Sepa

The European Payments Council has hit out at accusations by consumer groups that customer protection and security procedures are being undermined by the roll-out of the new Sepa Direct Debits (SDD) scheme.

The Bureau Européen des Unions de Consommateurs (BEUC) has warned that the European Commission's objective to create a Single Euro Payments Area risks being derailed by a downgrading in basic security under the new SDD programmee.

Monique Goyens, director general of BEUC, states: "The complete lack of security regarding key aspects of Sepa Direct Debit is practically a call for tender to fraudsters. Nothing requires banks to check the reliability of the issuer of the direct debit payment, neither the validity of the mandate, meaning a fraudster in as far away as Finland or Romania could, with my bank details and my name and address, instruct my bank to take money from my account without my consent."

Goyens has also attacked the EPC, the bank co-ordinating body for Sepa, for failing to take into account the needs or wishes of end-users.

"Time and time again we have asked the European Payments Council to take into account our concerns and time and time again we have been ignored. Such behaviour gives self-regulation a bad name and we welcome that the European Parliament and the ECB are beginning to wake up on these issues. The future of Sepa is at stake."

The EPC has refuted the accusations, claiming that SDD Schemes are fully aligned with consumer rights as defined in the EU Payment Services Directive (PSD). It says the scheme grants consumers a "no-questions-asked" refund right during the eight weeks following the debiting of a consumer's account and that this extends to thirteen months for an unauthorised deductions.

EPC chair Gerard Hartsink states: "The SDD Schemes are built on the same business assumptions and basic trust between the parties involved as the established pre-Sepa, national direct debit model used for decades in the majority of EU Member States."

In countries new to direct debits, says Hartsink, the SDD model includes the option to create 'e-mandates' under which the consumer authorises a biller to collect payment by direct debit. In this case, the consumer's bank has the option to verify whether the consumer authorised a direct debit collection.

Hartsink adds: "The process of defining Sepa schemes catering to corporate enterprises, small and medium-sized businesses, public administrations and consumers across 32 countries can be compared to designing a car model: the basic model must meet key market requirements. At the same time, the model must be flexible enough to include options to add extras on demand. This concept provides maximum choice to customers while avoiding that a majority of customers has to buy features they do not need."

Beuc has been agitating for a change in EPC governance procedures and for a greater say in decision-making for end-users.

In response, Hartsink points to the establishment of the EPC's Consumer Staekholder Forum (CSF) in 2007.

"The CSF provides organisations representing customer interests on a European level, including the BEUC, with the opportunity to bring their ideas to the table," he says. "Obviously, there are differentiated - and occasionally mutually exclusive - views on Sepa requirements among and within individual customer segments. It therefore needs to be recognised that the benefits resulting from the Sepa harmonisation exercise are at risk if all market participants insist on cementing their own legacy payment habits via the Sepa schemes. Some adjustments are required by all parties."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

European banks call for more political backing for Sepa

European banks call for more political backing for Sepa

13 October 2009  |  9490 views  |  2 comments
EBA Clearing ready for Sepa Direct Debit launch

EBA Clearing ready for Sepa Direct Debit launch

12 October 2009  |  6024 views  |  0 comments
European Commission moves closer to enforcing Sepa end-game

European Commission moves closer to enforcing Sepa end-game

01 October 2009  |  8684 views  |  2 comments
Payment systems users warn of risks of Sepa failure

Payment systems users warn of risks of Sepa failure

21 July 2009  |  10759 views  |  4 comments
EBA Clearing banks launch direct debit implementation forum

EBA Clearing banks launch direct debit implementation forum

01 July 2009  |  6556 views  |  0 comments
SIX Group plans Sepa direct debit service

SIX Group plans Sepa direct debit service

23 June 2009  |  6068 views  |  0 comments
EC consults on Sepa migration deadline

EC consults on Sepa migration deadline

09 June 2009  |  9967 views  |  5 comments
France delays Sepa Direct Debit launch

France delays Sepa Direct Debit launch

01 May 2009  |  15564 views  |  3 comments
SEB outsources Sepa direct debits processing to Equens

SEB outsources Sepa direct debits processing to Equens

19 February 2009  |  8788 views  |  0 comments
VocaLink completes Sepa direct debit pilots with three European banks

VocaLink completes Sepa direct debit pilots with three European banks

11 February 2009  |  9958 views  |  0 comments
European Central Bank calls for 'urgent' action on Sepa

European Central Bank calls for 'urgent' action on Sepa

24 November 2008  |  11186 views  |  1 comments
EC moves to kick start Sepa direct debit scheme

EC moves to kick start Sepa direct debit scheme

04 September 2008  |  12775 views  |  0 comments
Inconsistent PSD implementation threatens Sepa project- Logica

Inconsistent PSD implementation threatens Sepa project- Logica

22 April 2008  |  7288 views  |  0 comments
Sepa goes live

Sepa goes live

28 January 2008  |  16757 views  |  0 comments
Denmark's PBS signs 117 banks to Sepa direct debit offering

Denmark's PBS signs 117 banks to Sepa direct debit offering

22 January 2008  |  10123 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
download the paper nowvisit www.sibos.comvisit www.capgemini.com

Top topics

Most viewed Most shared
HSBC switches on selfie payments in ChinaHSBC switches on selfie payments in China
12182 views comments | 26 tweets | 41 linkedin
Equifax hack: Visa and Mastercard flag 200k compromised credit cardsEquifax hack: Visa and Mastercard flag 200...
10835 views comments | 6 tweets | 17 linkedin
Dutch bank sentences teenage DDoS culprit to community serviceDutch bank sentences teenage DDoS culprit...
9464 views comments | 6 tweets | 3 linkedin
Apple P2P payments service nears launchApple P2P payments service nears launch
8062 views comments | 18 tweets | 26 linkedin
UAE banks pool cyber security dataUAE banks pool cyber security data
8034 views comments | 5 tweets | 4 linkedin

Featured job

Competitive base, commission, benefits
London, UK

Find your next job