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Relationship between card-holders and card-issuers (II)

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Relationship between card-holders and card-issuers (II)

This recommendation aims to ensure a high level of protection for users of electronic payment instruments, thereby helping to construct a genuine internal market in such instruments.


Commission recommendation 97/489/EC of 30 July 1997 concerning transactions by electronic payment instruments and in particular the relationship between issuer and holder.


This recommendation is applicable in its entirety to all transactions involving instruments that allow remote access to the holder's account, such as:

  • transfers of funds, other than those ordered and executed by financial institutions, effected by means of an electronic payment instrument;
  • cash withdrawals by means of an electronic payment instrument and the loading (and unloading) of an electronic money instrument, at devices such as cash dispensing machines and automated teller machines and at the premises of the issuer or an institution who is under contract to accept the payment instrument.

This recommendation applies in part to electronic money instruments. However, where the electronic money instrument is used to load (and unload) value through remote access to the holder's account, it is applicable in its entirety.

This recommendation does not apply to:

  • payments by cheque;
  • the guarantee function of certain cards in relation to payments by cheque.

Upon signature of the contract or, in any event, in good time prior to delivering an electronic payment instrument, the issuer should communicate to the holder the contractual terms and conditions governing the issue and use of that instrument and should indicate which law is applicable to the contract.

These terms should be clear, easily understandable and available in the official language or languages of the Member State in which the electronic payment instrument is offered. The minimum information that the terms should include is the following:

  • a description of the electronic payment instrument, including where appropriate the technical requirements and any financial limits that are applied;
  • a description of the holder's and issuer's respective obligations and liabilities;
  • where applicable, the normal period within which the holder's account will be debited or credited, including the value date, or the normal period within which he will be invoiced;
  • the types of any charges payable by the holder;
  • the period of time during which a given transaction may be contested by the holder and an indication of the redress and complaints procedures.

If the electronic payment instrument is usable for transactions abroad, the following information should also be communicated to the holder:

  • an indication of the amount of any fees and charges levied for foreign currency transactions, including where appropriate the rates;
  • the reference exchange rate used.

The issuer should supply the holder with information relating to the transactions effected by means of an electronic payment instrument. This information should include:

  • a reference enabling the holder to identify the transaction;
  • the amount debited to the holder for the transaction;
  • the amount of any fees and charges applied for particular types of transactions.

The holder should be able to verify the last five transactions executed with the instrument and the outstanding value stored on it.

The holder should be subject to certain obligations, namely:

  • he should use the electronic payment instrument in accordance with the terms governing the issuing and use of a payment instrument and, in particular, to take all reasonable steps to keep the instrument safe;
  • he should notify the issuer without delay after becoming aware of the loss or theft of the electronic payment instrument, the recording on his account of any unauthorised transaction, and any error or other irregularity in the maintaining of that account by the issuer;
  • he should refrain from recording his personal identification number or other code in any easily recognisable form.

Barring exceptions, the holder may not countermand an order which he has given by means of his electronic payment instrument.

Up to the time of notification, the holder should bear the loss sustained in consequence of the loss or theft of the electronic payment instrument, subject to a limit which may not exceed ECU 150, except where he acted with extreme negligence or fraudulently.

As soon as the holder has notified the issuer, he should not subsequently be liable for the loss arising in consequence of the loss or theft of his electronic payment instrument, except where he acted fraudulently.

The holder should not be liable if the payment instrument has been used without being physically presented or electronically identified.

The issuer may alter the terms, provided that sufficient notice of the change is given individually to the holder. A period of not less than one month is specified after which time the holder is deemed to have accepted the terms if he has not withdrawn.

However, any significant change to the actual interest rate should come into effect on the date specified in the publication of such a change. In this event, and without prejudice to the right of the holder to withdraw from the contract, the issuer should inform the holder individually of the change as soon as possible.

The issuer should be subject to a certain number of obligations, including the following:

  • he should not disclose the holder's personal identification number, except to the holder;
  • he should not dispatch an unsolicited electronic payment instrument to the holder;
  • he should keep internal records of the transactions specified in this recommendation;
  • he should ensure that appropriate means are available to enable the holder to make the notification required by the recommendation in the event of loss, theft or error;
  • he should prove, in any dispute with the holder concerning a transaction, that the transaction was accurately recorded and entered into accounts and was not affected by technical breakdown or other deficiency.

The issuer of an electronic payment instrument should be liable:

  • for the non-execution or defective execution of the transactions specified in the recommendation;
  • for transactions not authorised by the holder, as well as for any error or irregularity attributable to the issuer in the maintaining of the holder's account.

The amount of the liability should consist of:

  • the amount of the unexecuted or defectively executed transaction;
  • the sum required to restore the holder to the position he was in before the unauthorised transaction took place.

The issuer should be liable to the holder of an electronic money instrument for the lost amount of value stored on the instrument and for the defective execution of the holder's transactions in cases where the loss or defective execution is attributable to a malfunction of the instrument, of the device/terminal or any other equipment authorised for use, provided that the malfunction was not deliberately caused by the holder.

The Member States should ensure that there are adequate and effective means for the settlement of disputes between a holder and an issuer.



Entry into force

Deadline for transposition in the Member States

Official Journal

Recommendation 97/489/EC



OJ L 208 of 02.08.1997

Last updated: 08.08.2005