Banks gain power to pause suspicious payments, but scams persist

Estonian banks will be able to temporarily stop suspicious payments under a law passed by parliament, but the measure will not prevent every scam, ERR reports. Banks will also be able to contact police and share information with other financial institutions.

People in Estonia lost nearly 30 million euros to fraudsters last year, and only a few percent recovered their money. The Banking Association’s head of fraud prevention, Sandra Horma, said some customers may initially be unhappy when banks intervene, because they are often convinced they want to complete a transaction. Banks aim to protect people when it is clear they are communicating with a scammer.

A bank could, for example, step in when a customer tries to send an unusually large sum to a new recipient. But banks cannot intervene in every situation. Cash withdrawals and cash use rose significantly in 2026, Horma said, making it difficult for bank staff to act in branches. She cited cases in which people said they needed to sell their apartments because they were moving to Russia for medical treatment.

An October ruling by the European Court of Justice said banks must bear responsibility and refund customers when a fraudster makes a transfer without the victim’s consent. However, legal experts do not expect the ruling to lead to more compensation for fraud victims in Estonia.

Attorney-at-law Ksenia Kravtsenko said that, from a bank’s perspective, a payment is not unauthorised if a customer enters their security details after receiving a call and hands them to a scammer. In that situation, the customer has trusted someone they should not have trusted, she said.

Estonia also considered preventing people from entering Smart-ID passwords while on a phone call, as a way to curb scams. The solution was developed but abandoned because customers preferred convenience to security. Smart-ID creator Kalev Pihl said the restriction could disrupt legitimate activity, such as friends on a WhatsApp or Messenger call confirming payments to buy tickets together. He said he found more such examples than he had expected.