PSD Part 4: Refunds and Complaints
Good News for Banks
The PSD creates the concept of the “unique identifier” for payee. The payer’s PSP should state what is the unique identifier it requires to be able to carry out a transaction (BIC and IBAN, to be able to carry out a transaction (PayPal) etc) in its contract with the payer. If the payer’s PSP then carries out the instruction in accordance with the unique identifier supplied by the payer then it is deemed to have carried out its responsibilities, even if the unique identifier is inconsistent with the name and address of the payee also given by the payer.
This is big clarification of responsibilities for banks. In the past it was not clear whether the name and address took precedence over the account number in instructions from payers.
It is now clear that the responsibility is on the payer to know the bank account number of the beneficiary. This should reduce the number of queries and complaints.
Bad News for Banks
The bad news for banks is that the general thrust of the legislation is to give the customer the benefit of the doubt. Refunds are the norm unless the Payer’s PSP can prove fault on the part of the Payer on the Payee’s PSP (e.g. unapproved direct debit claim from payee’s PSP). Furthermore the Payer’s losses on lost or stolen instruments such as credit cards or security tokens is limited to EUR150.