(1) If unauthorised payment transactions are based on the use of a lost, stolen or otherwise missing payment instrument or as the result of other misappropriation of a payment instrument, the payer’s payment service provider may demand from the latter compensation for the loss thus incurred up to an amount of 50 euros.
(2) The payer is not liable pursuant to subsection (1) if
1. it was not possible for them to become aware of the loss, theft or other misappropriation of the payment instrument or of the fact of its having gone missing before the unauthorised payment transaction, or
2. the loss of the payment instrument was caused by an employee, an agent, a branch office of a payment service provider or some other body to which activities of the payment service provider were outsourced.
(3) In derogation from subsections (1) and (2), the payer is obliged to provide compensation to their payment service provider with regard to the entire damage caused as the result of an unauthorised payment transaction if the payer
1. has acted with fraudulent intent or
2. has brought about the damage by means of an intentional or grossly negligent violation
a. of one or several obligations under section 675l (1), or
b. of one or several conditions agreed for the issuance and use of the payment instrument
(4) In derogation from subsections (1) and (3), the payer is not under obligation to compensate their payment service provider for damages if
1. the payer’s payment service provider does not demand a strong customer authentication within the sense of section 1 (24) of the Act on Supervision of Payment Services (Zahlungsdiensteaufsichtsgesetz) or
2. the payee or their payment service provider does not accept a strong customer authentication within the sense of section 1 (24) of the Act on Supervision of Payment Services.
Sentence 1 does not apply if the payer acted with fraudulent intent. In the case governed by sentence 1 no. 2, that party who does not accept a strong customer authentication is under obligation to compensate the payer‘s payment service provider for the resulting damage
(5) In derogation from subsections (1) and (3), the payer is not obliged to provide compensation with regard to damage resulting from the use of a payment instrument after a report has been made pursuant to section 675l (1) sentence 2. The payer also is not obliged to provide compensation with regard to loss within the meaning of subsection (1) if the payment service provider failed to comply with their obligation in accordance with section 675m (1) no. 3. Sentences 1 and 2 are not to be applied if the payer acted with fraudulent intent.