In a significant legislative proposal, Estonia's Ministry of Finance plans to introduce a law that empowers banks to autonomously halt money transfers if they suspect fraudulent activity. This proactive measure aims to mitigate the rising incidents of phone scams, which have harmed thousands of individuals across the country. The proposed law will require banks to notify authorities, including the police and state information systems, whenever they take such actions.

Last year, Estonia witnessed over 3,600 individuals fall victim to various types of fraud, with scammers extracting more than 29 million euros through schemes primarily involving fraudulent phone calls and investment scams. The Ministry believes that by enabling banks to implement a pause on suspicious transactions, they can better protect consumers from becoming unwitting victims of such fraud. This new legal framework could mark a pivotal change in how financial institutions address potential fraud and assist in lowering these alarming statistics.

The initiative reflects a growing concern within Estonia about the safety of digital financial transactions. As scammers become increasingly sophisticated, the law aims to provide banks with the necessary tools to identify and prevent fraudulent activities proactively. Given the prevalence of scams that exploit user authentication tools, the proposal seeks to empower banks not only to stop dubious transactions but also to work collaboratively with law enforcement agencies to combat financial crime more effectively.