Hungary Eyes Shift in Fraud Liability: Banks May Soon Bear the Brunt of Customer Losses
Budapest, Hungary – July 17, 2025 – In a important move to bolster consumer protection in the digital age, the National Bank of Hungary (MNB) is advocating for a fundamental change in how financial fraud losses are handled.The central bank proposes that banks, rather than customers, should absorb the majority of damages from fraudulent transactions, a departure from the current practice where victims often bear the brunt. This initiative aims to address the escalating sophistication of cyber fraud,which has seen a notable shift from targeting customer devices to directly exploiting sensitive data thru psychological manipulation and deceptive online schemes.
The MNB’s proposal stems from a growing concern over the increasing prevalence and evolving nature of financial scams targeting Hungarian citizens.Lajos Bartha, Managing Director of the MNB, highlighted during a recent briefing that while fraud is a global phenomenon, Hungary is witnessing a surge in digital-based abuses. Previously, fraudsters focused on acquiring customer access tools, but the current trend sees them adeptly manipulating individuals through tactics like fake prize draws, counterfeit websites, and sophisticated psychological ploys to illicitly obtain personal data. Notably, “come-on fraud” and “romantic fraud,” involving deceptive online relationships, have emerged as leading methods of abuse.
This proposed shift in liability is especially significant given that banks currently absorb only 8 percent of the total damage caused by fraud, with customers bearing the remaining 92 percent. The MNB’s push to accelerate the implementation of the Payment Services Regulation (PSR), an EU framework not slated for full integration until 2027, underscores the urgency of the situation.
The Hungarian government, through the Ministry of National Economy (NGM), has reportedly expressed openness to the MNB’s plan. Consultations are underway, and if a compromise is reached, the proposal could be put to a vote in the autumn, with a potential effective date of January 1, 2026. This would place Hungary ahead of the EU-wide timeline for such protections.
In parallel, the MNB is undertaking critical infrastructure work. By July of next year, the central bank is tasked with integrating facts from the central abuse system, managed by GIRO, into its own operational systems.This integration is crucial for effectively monitoring and combating fraud across the financial sector. The MNB is currently verifying that all banks are compliant with the deadline for joining this system.
Evergreen Context:
The evolving landscape of financial fraud presents a persistent challenge for individuals and institutions worldwide. As technology advances, so too do the methods employed by malicious actors. The shift from device-based theft to data exploitation and psychological manipulation highlights the need for continuous adaptation in security measures and regulatory frameworks. Consumer protection in the digital realm is a growing area of focus for financial regulators globally, with many countries grappling with how to best safeguard citizens from increasingly sophisticated scams. The Hungarian initiative to place greater liability on financial institutions reflects a broader trend towards ensuring that the entities best equipped to prevent and mitigate fraud bear a more significant responsibility for its consequences, thereby incentivizing robust security protocols and proactive customer education. The success of such measures frequently enough hinges on effective collaboration between regulatory bodies, financial institutions, and technology providers, as well as ongoing public awareness campaigns to equip individuals with the knowledge to identify and avoid fraudulent schemes.
