§ 3-21. Reduction of the excess when an electronic signature is misused

The Financial Contracts Act (Finansavtaleloven)·LOV-2020-12-18-146

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In brief

The excess (egenandel) under § 3-20 can be reduced when it is reasonable.
Three factors are weighed: the nature of the security information, the circumstances of the misuse and the service provider's (tjenesteyter) contribution.
A reduction is also possible if a supplier understood or should have understood that the signature was being used unlawfully.
Other grounds for reduction and objection still apply.

The text of the law (unofficial translation)

§ 3-21. Reduction of the signature holder's liability for the excess

(1) The signature holder's (rettighetshaver) liability under § 3-20 second and third paragraphs may be reduced when this is reasonable, taking into account the nature of the personal security information that was linked to the misused electronic signature creation data, the circumstances that existed when the misuse was carried out, and any lack of due care or other circumstances on the part of the service provider that contributed to the loss occurring.

(2) The signature holder's liability under § 3-20 second and third paragraphs may also be reduced if a supplier of goods or services who has received a performance on the basis of misused electronic signature creation data in connection with a financial service (finansiell tjeneste) understood or should have understood that the use of the electronic signature creation data was unlawful.

(3) The first and second paragraphs do not limit the signature holder's right to a reduction or to raise other objections on other grounds.

Source: Lovdata — Finansavtaleloven (the Financial Contracts Act) § 3-21

What does this mean?

This section makes it possible to reduce the excess when an electronic signature (elektronisk signatur) (a digital signature used to enter into financial agreements (finansavtaler)) has been misused. The excess that the owner of the signature may otherwise have to pay follows from § 3-20. Under § 3-21 it can be reduced if this is reasonable. Three factors are weighed: what kind of security information (for example a code or password) was behind the signature, what the circumstances were when the misuse happened, and whether the service provider was negligent or contributed to the loss in other ways.

The excess amounts are set out in § 3-20. The ordinary excess is up to NOK 450, and it does not apply if the customer (kunde) could not have discovered the misuse and did not act fraudulently. In cases of gross negligence (grov uaktsomhet), the cap is NOK 12,000. The reduction in § 3-21 applies to these two levels, not to the liability for intentional breach in the fourth paragraph of § 3-20. So even an excess of NOK 12,000 can be reduced if the circumstances justify it.

The second paragraph provides a separate ground for reduction that concerns a third party. If a supplier of goods or services has received payment through the misused signature in connection with a financial service, and understood or should have understood that the use was unlawful, the excess can also be reduced. In that case it is the supplier's conduct that counts, not the service provider's.

The third paragraph makes clear that the section does not close off other routes. The customer can still claim a reduction on other grounds or raise other objections. The section works together with the surrounding rules. The provider must explain how misuse is to be reported (§ 3-17), and the customer must keep the security information safe (§ 3-19).

Related sections

All sections of the Financial Contracts Act →