STJ holds banks liable for losses caused by digital fraud and scams

On October 21, 2025, the Third Panel of Brazil’s Superior Court of Justice (STJ) ruled that banks and payment institutions must compensate consumers who suffer financial losses due to online scams, when security deficiencies, failures in detecting unusual transactions, or ineffective fraud-prevention measures are identified. The case concerned a customer deceived into believing he was speaking with his bank’s official support, which led to unauthorized loans and high-value transfers.

Justice Ricardo Villas Bôas Cueva noted that the disputed operations diverged from the client’s typical financial behavior, evidencing flaws in verification and monitoring systems. The ruling emphasizes that financial entities have a duty to maintain robust fraud-prevention tools capable of promptly detecting and blocking suspicious activity, ensuring the protection of customers’ data and assets in digital environments.

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