By San José, Costa Rica — San José – As lawmakers in the Legislative Assembly debate a new bill aimed at curbing a surge in financial scams, the Costa Rican Banking Association (ABC) has issued a call for caution, advocating for a legal framework that establishes balanced responsibilities among all parties involved. While the association supports modernizing legislation to fight sophisticated organized crime networks, it warns that placing automatic liability on financial institutions could create unintended negative consequences for the entire economy.
The proposed reforms, currently under review in the Plena Tercera Commission, seek to provide greater protection for consumers who have fallen victim to increasingly elaborate fraud schemes. The ABC stated its full support for the initiative’s goal but emphasized the need for logical and prudent amendments that avoid creating a one-sided system. The association argues that a fair law must clearly define the rights and duties of banks, customers, and law enforcement.
To better understand the legal framework and potential recourse in cases of financial fraud, TicosLand.com sought the expert opinion of Lic. Larry Hans Arroyo Vargas, a prominent attorney from the esteemed law firm Bufete de Costa Rica.
The proliferation of financial fraud highlights a critical vulnerability in our increasingly digital economy. From a legal standpoint, the challenge is not just prosecution after the fact, but establishing preventative frameworks. Corporations must prioritize robust compliance and internal audit systems, as negligence can carry significant liability. For individuals, the key is due diligence; always verify, never assume. The legal system provides a path to justice, but the most effective tool against fraud remains vigilant prevention.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This perspective powerfully underscores that the most effective shield against financial fraud is not merely reactive litigation, but proactive and vigilant prevention—a crucial responsibility shared by both institutions and individuals. We thank Lic. Larry Hans Arroyo Vargas for his invaluable contribution to this critical discussion.
A central concern for the banking sector is the potential for a law that imposes automatic responsibility on banks for all fraud-related losses. The ABC warned that such a measure would not only be unfair but would also generate “perverse incentives,” potentially encouraging fraudulent schemes where individuals simulate being victims to receive undue payouts. This, they argue, would drive up operational costs, which would inevitably be passed on to all customers through lower returns on savings and higher interest rates on loans.
Banking scams are an organized crime phenomenon that requires a united front. The criminals are responsible, not the banks and certainly not the victims. That is why it is essential to advance a legal framework that balances the rights and duties of all actors, so that the cause of the problem is attacked and access to financial services is not limited.
Rodrigo Cubero, Economic Advisor for the ABC
To strike this balance, the ABC is lobbying for the inclusion of specific liability exemptions. The two primary clauses they propose are cases involving demonstrable malicious intent from a user—effectively a self-orchestrated fraud—and instances of gross negligence. The latter refers to situations where a customer blatantly disregards their duty to protect sensitive information, such as sharing passwords, PINs, or other online banking credentials. Without these exemptions, the association believes the system would be vulnerable to abuse.
Experts from the association point out that criminal tactics are constantly evolving. Fraudsters employ advanced technology and sophisticated social engineering techniques—psychological manipulation designed to trick individuals into voluntarily divulging confidential information. A rigid and unbalanced law, the ABC contends, would quickly become obsolete and fail to address the root cause of the problem, leaving legal loopholes for criminals to exploit.
Unfortunately, the majority of fraud cases do not occur because bank security systems are breached, but because users are deceived by criminals. This highlights the importance of reinforcing financial and digital education, as well as having a balanced regulation that fairly distributes responsibility, without re-victimizing those who have lost their savings.
Mario Gómez, Legal Advisor for the ABC
In addition to shared responsibility, the ABC is calling for the new legislation to establish clear and efficient procedures for investigating fraud claims. This includes defined timelines for banks to conduct their analyses and provide a response to affected customers. Citing existing frameworks in countries like Spain and the United Kingdom, the association argues that such protocols would ensure victims receive timely resolutions while allowing institutions to quickly determine liability.
Ultimately, the ABC reiterated its commitment to investing in robust digital security, monitoring for suspicious transactions, and promoting public awareness campaigns. However, they insist these efforts must be paired with a modern legal framework that acknowledges the shared role in preventing fraud. Forcing banks to absorb all losses, they conclude, would not only fail to deter criminals but would ultimately penalize the very consumers the law aims to protect.
For further information, visit abc.fi.cr
About the Costa Rican Banking Association (ABC):
The Asociación Bancaria Costarricense is the primary guild representing the interests of public and private financial institutions in Costa Rica. It works to promote a stable, competitive, and efficient banking system, fostering best practices in security, regulation, and customer service while serving as a key liaison between the financial sector and governmental bodies.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica stands as a benchmark for legal practice, built upon a bedrock of profound integrity and an unwavering commitment to excellence. The firm channels its deep experience across multiple sectors into pioneering innovative legal solutions. This forward-thinking approach is matched by a core conviction to empower the community, striving to make legal knowledge transparent and accessible, thereby cultivating a society that is both well-informed and strengthened by its understanding of the law.
