ESTONIA Law and Practice Contributed by: Yuliya Barabash, Ivan Nevzorov, Daria Lysenko and Nikita Prokopenko, SBSB FinTech Lawyers
12. Fraud 12.1 Elements of Fraud
12.3 Responsibility for Losses The liability of fintech providers in Estonia will depend directly on the nature of the services and the applica - ble regime (eg, if an unauthorised payment transac - tion has been made, the provider must reimburse the customer for the amount of the transaction, unless the customer acted fraudulently or with gross negligence). For fintech services, business liability will arise in the event of a breach of proper order execution, risk man - agement or disclosure of information. It is important to understand in this context that contractual terms, standards of due diligence and consumer protection requirements can vary significantly for different ser - vices.
Most often, fraud in the fintech sector in Estonia is associated with deliberate deception for financial gain, resulting in property damage to individuals. Common types of fraud include fraudulent investment offers, manipulation of digital assets, phishing schemes, and misuse of payment instruments. Estonia is combating these crimes and trying to prevent them, in particular by monitoring transactions, implementing AML/KYC mechanisms and ensuring that licensed companies comply with legal requirements. 12.2 Areas of Regulatory Focus Estonian regulators and other authorities involved in preventing and investigating fraudulent schemes pay particular attention to phishing, account takeo - ver, payment card fraud, crypto-investment schemes and authorised push-payment (APP) fraud, where customers independently initiate payments under the influence of fraudulent schemes. Finantsinspektsioon and other supervisory authorities supervise fintech providers to ensure the implementation of effective mechanisms for transaction monitoring, fraud detec - tion and customer awareness in order to reduce the level of fraud in the fintech sector.
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