Luxembourg tops EU table for e‑money fraud losses

Banking customers in Luxembourg have racked up the biggest losses to fraudulent electronic money transactions out of 30 European countries, accounting for almost half the continent’s total last year, according to an official report by EU regulators.

“In absolute terms, Luxembourg reported the highest value of fraudulent payment transactions (€45.3 million),” the European Banking Authority (EBA) and European Central Bank (ECB) said in the report published on Monday, which covered the 27 EU member states and Iceland, Liechtenstein and Norway in 2024.

Luxembourg’s collective e-money fraud losses represented 44.4% of the European total.

Ireland (€25.6 million) and Italy (€18.5 million), respectively, had the second and third highest losses from e-money fraud.

The EBA and ECB noted in their report that “fraudulent e-money transactions in 2024 appeared to be concentrated in countries where e-money payments were more prevalent.”

In other words, the Grand Duchy’s high rate was attributed to the relatively high concentration of e-money providers with EU hubs located in Luxembourg and the comparative popularity of e-money apps with consumers in the country.

Italy recorded the highest total number of individual fraudulent e-money transactions (447,000), followed by Luxembourg (393,000) and then Estonia (59,000).

Luxembourg registered lower amounts than neighbours for other types of payment fraud. The Grand Duchy ranked eighth in credit transfer fraud; behind Germany, France, Spain, Italy and Denmark in direct debit fraud; and was listed 11th for both card payment fraud and cash withdrawal fraud, categories in which France came in the unwanted top spot.

The proportion of fraudulent credit transfers in Luxembourg was 0.002% of the total number of transactions, the same rate recorded for the entire EU, the regulators’ figures showed.

Luxembourg had the third highest ratio of card payment fraud (0.020%), behind France (0.34%) and Spain (0.022%), and fourth highest rate of cash withdrawal fraud (0.008%), behind France (0.012%), Lithuania (0.011%) and Spain (0.009%).

For most types of payments, the user – in other words, the customer who initiated the payment – bore responsibility for the greatest amount of total fraud-related losses in Luxembourg in 2024. A notable exception was for electronic money payments, where either the payer or payee’s financial institution shouldered liability in 99% of cases.

The report was based on self-declared figures made by financial firms in annual and semi-annual filings to European and national regulatory agencies.

The EU’s new instant payments scheme was rolled out in Luxembourg earlier this year, which aims to reduce payment fraud and customer errors.