NBG: Protection of consumers in vulnerable segments applies only to high-risk transactions and does not extend to standard payments or transfers

The amendments to the National Bank of Georgia’s regulations regarding strong customer authentication and the protection of consumer rights during the provision of services by financial organizations aim to protect consumers against high-risk transactions and potential financial fraud.

According to the NBG, additional protective mechanisms apply in cases where a tax service provider (including a commercial bank, micro-bank, registered tax service provider and microfinance organisation) simultaneously reveals four circumstances:

Payment transaction is associated with high-risk fraud activity;

An unusual pattern of consumer spending and behavior is identified;

The amount of the payment operation exceeds 500 GEL;

The age of the customer is above 60.

“In all the cases listed above, the payment service provider is required to suspend the execution of the electronic payment transaction initiated by the user for 48 hours, contact the user, and provide appropriate information regarding risks or potential fraud in a simple and understandable manner.

The customer will have 48 hours to make the final decision. If the customer decides to continue the operation, he/she should confirm to the service provider.

The amendment complies with the best international practice. A similar approach, namely, a mechanism for suspending high-risk transactions of a certain volume, is in place in countries such as the U.S., Canada, Brazil, the United Kingdom and EU member states,” the NBG said.