EBA Q&A 2019_4573 — Q&A — Immediate Refund by the Payment Service Provider [Rejected question]

Immediate Refund by the Payment Service Provider of unauthorised SEPA Direct Debit transactions after 8 weeks.

Question

Our question is related to ‘unauthorised’ transactions, and as from when it is qualified as unauthorised? Is this as soon as any payment service user claims that the transaction is unauthorised? -Or is this as soon as the payment service provider analysed if the transaction is really unauthorised?

Background

The PSD2 recognises the difference between authorised and unauthorised transactions.

Within 8 weeks authorised transactions can be refunded immediately on a 'no questions asked' principle.

Is this as soon as any payment service user claims that the transaction is unauthorised? (In practice for direct debits this is only after 8 weeks and before 13months after the initial transaction?)

Or is this as soon as the payment service provider analysed if the transaction is really unauthorised? (in 68% of the cases).

It is indeed impossible to know before analysis if the transaction is unauthorised or not? (And from then on of course immediate reimbursement with the original value date.)

If however the refund would always be immediate -as well for authorised as unauthorised transactions- we do not understand why in the Directive a difference has been made between both status?

During the first 8 weeks a Sepa Direct Debit –Core scheme collection can be refunded immediately on a 'no question asked' basis.

After 8 weeks -until 13months- a collection can only be refunded in case of an unauthorised collection (=no valid mandate).

Mandates are stored by the Creditor.

The EPC SDD scheme rules have put in place a strict procedure on exchanging copies of mandates allowing the PSP of the payer to analyse the 'unauthorised' character of the transaction. This procedure has a maximum timeline of 1 month but is mostly faster. After 1 month maximum the client is reimbursed (62% of the cases) or informed about the decision. After analysis on average 68% of these refund requests are valid and 32% are invalid (in this last case the client should not be credited) The PSD2 Art73§1 imposes to reimburse clients always immediately for both reasons authorised and unauthorised transactions.

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Answer

Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.

If you believe your question would still benefit from clarification, you are invited to resubmit your question, adapting it to reflect any legislative, regulatory or other relevant developments that may have occurred since the initial date of submission. The EBA will aim to address resubmitted questions as a matter of priority. When considering to resubmit, you are kindly requested to observe the updated admissibility criteria agreed in the context of the adjustment of the Q&A process, available in the Additional background and guidance for asking questions. We hope for your understanding.

For further information please refer to the press release and the updated Q&A page.

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Source: EBA original document