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Payments and e-money institutions in Lithuania have been accused of failing to comply with payment services regulations regarding the terms of their user contracts.
The Bank of Lithuania reviewed contracts from 55 e-money and payment institutions regarding payment services for residents and discovered that there was only partial compliance with payment service rules, it said on Monday (April 15).
"Payment service providers must ensure that contracts comply with applicable legal requirements. They need to be constantly reviewed and updated. In addition, contracts must be clear and understandable to the user," said Vaidas Cibas, the central bank’s head of financial services and market supervision.
The regulatory official called on institutions whose general provisions of payment service contracts do not comply with payment services laws to immediately eliminate the discrepancies, adding that the central bank will be monitoring to ensure that this directive is properly implemented.
Major discrepancies were noted in liability provisions for unauthorised payment transactions.
For example, some contracts were found to be imposing shorter notification periods than required by law and unfairly shifting responsibility to consumers.
Similarly, many contracts lacked clarity on institutions' responsibility for payment transaction execution, failing to differentiate between payer-initiated and payee-initiated transactions, as is mandated by law.
Provisions for contract modification and termination also often deviated from legal standards, allowing unjustified fee increases or imposing improper conditions upon termination.
Moreover, although institutions retained the right to block payments or payment accounts, they frequently came up short in obligations to inform users promptly and clearly about such actions.
The Bank of Lithuania also criticised contracts that were complex, had lengthy terms or used legal jargon, which it described as “unfriendly language” for users.
In addition, it highlighted instances where contracts in English employed terms unfamiliar to Lithuanian law, complicating understanding for consumers.
The Bank of Lithuania did, however, give examples of best practice, such as clear information presentation, easy cancellation procedures and language preference options for users.
