ECJ rules banks must refund fraud victims, shifting liability burden

The European Court of Justice (ECJ) has ruled that EU banks must provisionally refund customers for account fraud losses, even in cases of alleged gross negligence, with banks retaining the right to reclaim funds if fraud is proven. This shifts interim liability to financial institutions, impacting fraud dispute processes and potentially increasing compliance costs across the EU banking sector. The practical implications depend on national implementation and bank recourse mechanisms.