15 April 2014

EPC Blog: Commission's PSD2 risks undermining consumers' refund right under SEPA

The PSD2 article 67, "refunds for payment transactions initiated by or through a payee", proposed by the EC, risks undermining consumers' unconditional refund right for direct debits included with SEPA Direct Debit Core Scheme.

The European Commission has published its proposal for the revised Payment Services Directive (PSD2). The proposed PSD2 remains subject to review and adoption by the European Union co-legislators, i.e. the European Parliament and the Council of the EU. 

PSD2 will continue to be of particular relevance with respect to SEPA Direct Debit (SDD) services due to the fact that it defines common rules for the authorisation and the refund of direct debits. The EPC sees a pressing need for a review of the proposed new Article 67, (entitled "refunds for payment transactions initiated by or through a payee"), regarding the details of the unconditional refund right for direct debits. In the view of the EPC, the Commission’s proposal for PSD2 risks undermining the consumer’s unconditional refund right for direct debits included with the SDD Core Scheme developed by the EPC in close dialogue with all stakeholders.

The EPC calls on the members of the European Parliament to be elected in May 2014 and the EU government ministers represented in the Council of the EU to further review the new Article 67 included in the Commission’s proposal for PSD2. It is now the responsibility of the EU co-legislators to ensure that consumers making SDD payments can continue to rely on the "no-questions-asked" refund right provided with the SDD Core Scheme in a consistent fashion across SEPA except if otherwise agreed between the consumer and the payee through a specific mandate.

In addition, this blog updates on the state of play of and next steps in the EU legislative process leading to the adoption of PSD2.

Full blog

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