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CMS Monaco – Bank fraud on the rise: customers are

responsible for keeping their bank details secret

by Olivier Marquet et Victoria Moreau

As technology continues to progress and digital payment methods become the norm, tackling fraud
is now a major challenge for banks and their customers. While both need to be constantly on
guard against bank fraud, the question remains: who ultimately pays the price when fraudsters are
successful?

as the customer. When using this method, affected. They are required to show that the
the criminals are able to have the bank’s loss was not due to their own negligence, but
phone number and location displayed on the to a failure by the bank such as a breach of
customer’s phone. With the development of its contractual obligations. In practice, this is
AI, some fraudsters are even able to mimic the hard to prove.
voices of bank employees as part of their ploys.
Other types of fraud involve sending emails In these circumstances, the most effective way
(“phishing”) or text messages (“smishing”) to to definitively address bank fraud is through
customers. By replying to these messages, prevention rather than cure. This requires all
victims pass on their bank details and enable parties to be constantly vigilant and to adopt
the criminals to make fraudulent use of their behaviours that take into account the risks
© CMS Monaco payment methods. posed by the resurgence in this type of fraud.
Hence the vital need for regular awareness-

Victoria Moreau (Associate) Customers must never share their bank raising campaigns designed to educate
customers about these risks.
details
Vishing, spoofing, smishing, phishing… While there are already specific measures in
Cyber-fraud goes by many unusual names place to address bank fraud in France and the
These odd terms all refer to fraudulent EU, including the PSD1 and PSD2 Directives,
practices used by cyber-criminals to steal these provisions have not been transposed into
money from bank customers through their Monegasque law. Although parts of French
payment methods. They first appeared with the and European banking law are applicable
development of online banking, coming on top in Monaco under agreements between the
of other more conventional types of fraud, the Principality and France, fraud measures are
most common of which is cheque forgery, and an integral part of the relationship between
other more elaborate schemes such as “fake the bank and its customers, and as such are
client” and “fake president” scams. However, governed exclusively by Monegasque law (and
these new types of fraud are different, in any terms and conditions applicable).
that criminals attempt to obtain bank details In practice, many banks in Monaco have
from customers themselves, then pose as the voluntarily adopted EU standards (e.g. by
customer to trick the bank into letting them introducing strong authentication processes
make purchases. These practices, already for payment methods), but the issue of liability
commonplace in neighbouring countries, are for bank fraud continues to be governed by
now on the rise in Monaco. Monegasque ordinary law.

Innovative and complex methods Bank, customer, fraudster: who is liable?
One of the most frequent types of cyberfraud When faced with hardened fraudsters, it
is known as “vishing”, a telephone-based is unfortunately difficult to identify the
variant of “phishing”. The fraudster poses as perpetrators of this type of crime. Consequently,
an employee of the bank - usually having first customers who have been the victim of fraud
infected the customer’s computer - to obtain often seek redress for their loss by holding
confidential information directly from the the bank liable. Monegasque law contains
customer themselves. They then send payment no specific provision for these situations, and © FreePik
instructions to the bank, this time posing so the burden of proof lies with the customer

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