Immediate refund for unauthorised payment transactions cannot be refused for payer's gross negligence (CJEU)

The CJEU has held that a payment service provider (PSP) cannot refuse to immediately refund a payer the amount of an unauthorised payment transaction on the ground that the payer enabled that transaction through gross negligence in breach of their obligations under Article 69 of Directive (EU) 2015/2366 (PSD2) (Tukowiecka, Case C-70/25, 15 October 2026).

Background

A bank refused to reimburse a customer payment service user (PSU) who was the victim of a phishing fraud, arguing that the loss resulted from the customer’s gross negligence in failing to safeguard her payment instrument, which the bank claimed exonerated it from the immediate refund obligation.

The referring court asked the Court of Justice of the European Union (CJEU) whether Articles 73(1) and 74(1) of PSD2, read together, allow a PSP to refuse immediate reimbursement where the payer’s (i.e. the PSU’s) loss results from their own gross negligence in breach of their Article 69 obligations.

Key findings in CJEU decision

1. Article 73(1) provides only one exception to the PSP’s obligation to immediately refund the payer: where the PSP has good reason to suspect fraud and reports this in writing to the competent national authority. No exception exists for suspected gross negligence by the payer.
2. Articles 73 and 74 govern distinct stages of the process: Article 73 imposes an immediate refund obligation, while Article 74 governs the subsequent allocation of liability/loss between the PSP and the payer (including full payer liability for losses caused by fraud or gross negligence under Article 69). Article 74 does not create an exception to the immediate refund duty; it only affects whether the refund is ultimately “final”.
3. This reading is supported by Article 72(2), which places the burden of proving the payer’s gross negligence on the PSP — reflecting a scheme designed to reinforce payer protection, not to let the PSP self-assess and withhold the refund.
4. A contrary reading would deprive the immediate refund obligation of its effectiveness and force the (often consumer) payer to litigate to recover funds, thus incurring procedural costs and burdens. This is incompatible with PSD2’s objective of ensuring a high level of consumer protection (recital 6).
5. On this basis, Articles 73(1) and 74(1) of PSD2 must be interpreted as meaning that a PSP cannot refuse to immediately refund a payer the amount of an unauthorised payment transaction on the ground that the payer made that transaction possible through gross negligence in breach of their obligations under Article 69.

Practical implications

• The CJEU’s decision would result in PSPs being required, in many cases, to automatically reimburse PSUs and only subsequently seek recovery of the funds from them, often with significant procedural cost and administrative burden. In practice, it is unclear if and how PSPs will be able to establish and substantiate grounds for suspecting fraud by a PSU within a single day, particularly where they are likely to need additional time to gather and assess relevant information from the PSU.
• The decision is therefore likely to reverse a widespread market practice under which many PSPs routinely refuse reimbursement and shift the burden of litigation onto consumers, as noted by the referring court.
• Under Article 56 of the proposed Payment Services Regulation (PSR), gross negligence, in addition to fraud, constitutes a ground on which a PSP may refuse to immediately reimburse a PSU. As a result, until the PSR enters into force, PSPs will need to adapt their internal processes and procedures to comply with the CJEU’s interpretation. This creates an interim period during which PSPs may be required to modify their reimbursement practices before the PSR becomes applicable.

How Arendt can help

The experts in Arendt's Banking & Financial Services team are available to assist in adapting your agreements, business policies and processes to reflect the impact of the CJEU’s decision.

Authors:

• Pierre-Michaël de Waersegger, Partner at Arendt
• Glenn Meyer, Partner at Arendt
• Emmanuelle Mousel, Partner at Arendt
• Marc Mouton, Partner at Arendt
• Anne-Sophie Besançon, Counsel at Arendt
• Estelle Brisson, Counsel at Arendt
• Andrei Costica, Counsel at Arendt
• Frédéric Schmit, Counsel at Arendt