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Date Published: 09/05/2025

Spanish banks must pay up: Supreme Court rules in favour of fraud victims

Financial institutions now liable for online fraud unless they can prove customer negligence

Banks can no longer dodge responsibility when their customers fall victim to online fraud. In a landmark ruling, Spain’s Supreme Court has confirmed that financial institutions are liable for unauthorised transactions, as long as the customer was not negligent and reported suspicious activity promptly.

The decision from the Civil Division of the High Court came after Ibercaja Banco appealed a previous ruling ordering them to compensate a customer who lost tens of thousands of euros to a SIM swap scam. The court dismissed the bank’s appeal, siding with the victim.

The case centred around a customer from Zaragoza who had nearly €84,000 stolen from his account through a series of unauthorised transactions. Some of the money was taken during the early hours, and none of the transfers had been approved by the account holder. The fraudsters used a duplicate SIM card registered to the victim’s wife in Murcia to gain access to the account.

Before the bulk of the money disappeared, the victim had already warned Ibercaja after receiving suspicious SMS alerts and a notification that someone had tried to access his Google account.

Although the bank recovered around €27,000, it refused to reimburse the remaining €56,000… until now.

The Supreme Court ruling, based on a report by Judge Manuel Almenar, points to both Spanish and European law which clearly states that the burden of proof lies with the bank. Unless a customer has committed fraud or acted with gross negligence, the financial institution is responsible for covering any losses.

The court also criticised the bank for not questioning why such large transfers were being made at unusual times, saying it failed in its duty to monitor for suspicious activity. According to recent data, two out of every five recorded crimes now involve online fraud, highlighting the growing scale of the issue.

This judgment could have major implications for future fraud claims. As scams become increasingly sophisticated, the ruling sets a strong precedent that banks must take more responsibility for protecting their customers - and their money.

Image: Joaquin Carfagna/Pexels

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