Luxembourg Records Highest E-Money Fraud Losses in Europe

Banking customers in Luxembourg have suffered the largest losses from fraudulent electronic money transactions across Europe, accounting for nearly half of the continent's total losses last year, according to an official report by EU regulators.

The European Banking Authority and European Central Bank reported that Luxembourg recorded €45.3 million in fraudulent payment transactions in 2024, representing 44.4% of the European total across 30 countries surveyed.

Background and Context

The joint report, published on Monday, covered the 27 EU member states plus Iceland, Liechtenstein and Norway, relying on self-declared figures submitted by financial firms in their annual and semi-annual regulatory filings. The data reveals significant gaps in reporting, with Iceland, the Netherlands, Romania and Slovakia failing to provide e-money fraud statistics, while Belgium, the Czech Republic, Estonia, Hungary and Latvia reported zero losses.

According to the regulators, "fraudulent e-money transactions in 2024 appeared to be concentrated in countries where e-money payments were more prevalent." Luxembourg's position as a hub for e-money providers with EU operations, combined with high consumer adoption of e-money apps, contributed to its elevated losses.

Key Figures and Entities

Ireland recorded the second-highest losses at €25.6 million, followed by Italy at €18.5 million. However, Italy led in the number of individual fraudulent transactions with 447,000 cases, followed closely by Luxembourg with 393,000 incidents.

Despite the high absolute losses, Luxembourg's fraud rate remained relatively low at 0.008%, meaning eight out of every 100,000 transactions were fraudulent—below the EU-wide average of 0.011%. In value terms, fraud represented €17 per €10,000 of e-money transactions in Luxembourg, compared to €18 across the EU.

In other payment fraud categories, Luxembourg ranked lower: eighth in credit transfer fraud, behind several larger economies in direct debit fraud, and eleventh for both card payment and cash withdrawal fraud, where France recorded the highest losses.

Legal and Financial Mechanisms

The regulatory data reveals a distinctive pattern in liability allocation. For most payment types in Luxembourg, the customer initiating the payment bore responsibility for the majority of fraud-related losses in 2024. However, e-money payments represented a notable exception, with financial institutions shouldering liability in 99% of cases.

This structural difference in risk allocation may explain why e-money fraud losses, while substantial in absolute terms, remained proportionally low relative to transaction volume. The concentration of e-money institutions in Luxembourg creates a regulatory environment where providers assume greater responsibility for fraudulent activities on their platforms.

International Implications and Policy Response

The findings highlight challenges in cross-border payment supervision and fraud prevention across Europe's integrated financial markets. The incomplete data from several member states underscores the need for more standardized reporting mechanisms to accurately assess and combat payment fraud.

Earlier this year, Luxembourg implemented the EU's new instant payments scheme, designed to enhance security and reduce both payment fraud and customer errors. This regulatory response reflects growing recognition that the rapid expansion of digital payments requires stronger safeguards and coordination among European financial authorities.

Sources

This report draws on the joint European Banking Authority and European Central Bank report on payment fraud statistics for 2024, which collected self-declared figures from financial firms across 30 European countries. The analysis incorporates regulatory filings submitted to both European and national authorities between 2024 and 2025.