Allocation of liability in case of fraudulent use of an electronic payment instrument: The new Directive on payment services in the internal market

In December 2007, the European Directive on payment services in the internal market was published in the Official Journal. This Directive contains many rules on payments, including rules on the allocation of liability in case of fraudulent use of a payment instrument. The aim of this paper is to discuss and evaluate the regime concerning fraudulent payment transactions which is incorporated in the new Directive. It will show that the new regime creates important risks for the holder of an electronic payment instrument and will therefore propose to divide liability in another way.