Importance of timely reporting of card misuse in light of the latest ECJ decision
On August 12, 2025, the European Court of Justice (ECJ) addressed the question of within what timeframe holders of payment cards must report an unauthorized payment transaction to their bank. The judgment (C-665/23) provides reason to examine the rights and obligations of the parties involved more closely, taking into account the requirements of European Union law.
Initial situation: Detecting and reporting unauthorized transactions
According to the EU-wide Payment Services Directive, payment cardholders are obliged to report any unauthorized transaction to their bank as soon as they become aware of it. The concept of ‘culpable delay’ forms a central threshold in this context. The ECJ has now clarified that a cardholder only fulfills this obligation if they actually report the incident to the credit institution immediately after gaining knowledge of it and no avoidable or culpable delay can be established.
Defining the reporting obligation: immediacy and reasonableness
Content of the reporting obligation
According to the ECJ, the reporting obligation includes not only the formal notification to the bank, but also the requirement that the cardholder acts actively and without self-inflicted delay. This means that mere inaction or waiting after learning of potentially unauthorized payments can result in significant legal disadvantages.
Standards for culpable delay
The standard of fault is of central importance. The assessment of whether a report was made ‘without culpable delay’ always depends on the circumstances of the individual case. In particular, it must be evaluated whether the cardholder has done what is reasonable to clarify and notify the incident. If culpable delay is present, claims for reimbursement against the payment service provider may, under certain circumstances, be excluded.
Bank rights in the event of late reporting
Credit institutions are not obliged to reimburse the customer for losses or incorrect postings in the case of late reporting of unauthorized transactions if the customer is at fault. The prerequisite is that the bank can prove that the deadline was missed without sufficient reason and that there was evidently culpable behavior on the part of the cardholder.
Impact of the ECJ judgment on practice
The ECJ judgment provides greater legal certainty regarding compliance with time limits and reinforces the duties of care associated with card usage. Credit institutions may refine their review procedures and contract terms in response to the ECJ’s requirements.
For companies, investors, and high-net-worth individuals, close monitoring of their payment transactions and thorough documentation of payment operations are becoming increasingly important. The issue of the burden of proof can have a crucial impact on the enforceability of reimbursement claims in the event of a dispute.
Special features and unresolved questions
Despite the clarifications by the ECJ, some detailed questions remain open, such as the degree of personal initiative required from cardholders, or how to deal with technical and organizational obstacles when reporting card misuse. The interplay with national limitation periods and civil law duties may also be the subject of further judicial clarification in the future.
Sources and legal references
The discussed decision can be accessed at: <a href="https://urteile.news/EuGHC-66523Kartenmissbrauch-muss-ohne-schuldhaftes-Zoegern-der-Bank-gemeldet-werden~N35293″>https://urteile.news/EuGHC-66523Kartenmissbrauch-muss-ohne-schuldhaftes-Zoegern-der-Bank-gemeldet-werden~N35293.
This is a concluded proceeding. The presumption of innocence remains in place for all issues yet to be clarified in the context of further proceedings.
Discrete advice for those seeking counsel
For specific legal questions in connection with the reporting of card misuse or the obligations explained here, in-depth advice tailored to the individual case may be advisable. The Rechtsanwälte of MTR Legal with extensive experience in banking, commercial, and capital markets law are available as discreet contacts for this purpose.
