Credit card fraud liability in Colombia

Research presented at the 60th Asobancaria Banking Convention identified credit cards as the primary source of fraud risk for e-commerce in Colombia, Brazil, and Mexico. The study noted that under global payment network rules, merchants often bear 100% of the financial responsibility for disputed transactions through chargebacks, a factor that can lead small and medium-sized enterprises to preemptively cancel suspicious transactions and risk rejecting legitimate customers.

Following these concerns regarding liability, the Superintendencia Financiera de Colombia issued a ruling stating that banks can be held civilly and contractually liable for fraudulent credit card transactions. In a specific case involving a transaction of 6,399,000 pesos, the regulator ordered a bank to reverse the amount plus interest. The authority determined that a bank’s responsibility is not waived simply because a customer lost physical control of a card; instead, liability depends on whether the institution failed to implement required security mechanisms or failed to detect transactions that deviated significantly from a customer’s habitual spending patterns.