Estonian banks gain right to suspend suspicious payments to fight online fraud
Estonia's parliament, the Riigikogu, has passed a law letting banks temporarily suspend suspicious payments and share information with police and other financial institutions. Last year scammers took nearly €30 million from people in Estonia.
Banks in Estonia have recently gained the right to temporarily suspend suspicious payments, and they plan to begin using it. The law was passed by the Riigikogu, Estonia's parliament, and also lets banks communicate with the police and share information with other financial institutions. It responds to the scale of online fraud: last year people in Estonia lost nearly €30 million to scammers, and only a few percent of victims recovered their money.
When banks can step in
Sandra Horma, head of fraud prevention at the Estonian Banking Association, said the change may not be welcomed by all customers at first, since people are generally convinced they want to complete their transactions. Banks want to protect people precisely when it is clear that a customer is communicating with a scammer. A bank can intervene, for example, when an unusually large sum is sent to a new recipient. Still, banks cannot act in every situation.
Cash withdrawals and cash use began rising significantly in 2026. Horma acknowledged it was very difficult to do anything at bank branches in such cases. There have also been people claiming they must sell their apartments because they are moving to Russia for medical treatment.
Who bears responsibility
In October, the European Court of Justice ruled that if a scammer makes a transfer without the victim's consent, the bank must share responsibility and refund the customer. Although the ruling is seen as a landmark decision, legal experts do not expect compensation payments in Estonia to increase.
Attorney Ksenia Kravtšenko said that if a customer receives a phone call, enters security credentials and hands them to a scammer, the bank does not treat the transaction as unauthorized, because the customer trusted someone they should not have.
A few months ago Estonia considered a measure that would stop people from entering Smart-ID PIN codes during a phone call. The solution is now ready, but the plan was dropped because customers prefer convenience over security. Kalev Pihl, creator of Smart-ID, said he had identified more such use cases than he initially expected.
