Banks Face Calls To Share Fraud Liability
Prof. Michelle Kelly-Louw of the University of Cape Town warns that South African banks and existing laws inadequately protect customers from electronic payment fraud, noting gaps in EFT regulation and intercepted OTPs. She urges statutory duties for banks, clearer AI fraud-detection rules, and adoption of shared-liability frameworks like those in the UK, EU, Singapore, and Australia. Implementing funding mechanisms and industry standards would shift risk and improve consumer restitution.
Key Points
- 1Identifies regulatory gaps in electronic funds transfers and electronic-banking law in South Africa
- 2Highlights systemic risk and potential large-scale losses if banks retain full liability for fraud
- 3Urges statutory duties, clearer AI regulation, shared-liability frameworks and funding mechanisms to protect consumers
Scoring Rationale
Moderate novelty and policy relevance, limited to South African legal context and single-expert perspective, lacking broader evidence.
Sources
Public references used for this report.
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