The Economic Secretary to the Treasury will today (12th March)
publish draft legislation which announces new measures to “break
the spell” of fraudsters, as part of the UK Government’s Global
Fraud Summit.
Under draft legislation published today, payment service
providers such as banks will be given more time to contact
customers, police, and other relevant parties when they have
reasonable grounds to suspect fraud or dishonesty before they
send a payment. This gives them a better chance of stopping money
being sent to fraudsters.
This legislation will apply to authorised push payments, subject
to limited exceptions. The UK has seen an increase in authorised
push payment fraud over the past few years - in 2022 victims lost
£485m to these scams.
Push payment fraud involves the fraudster deceiving the victim
into initiating and authorising a transaction, such as instances
of romance fraud where fraudsters have convinced their victim of
a romantic attachment, or investment fraud.
Until now, payment service providers, such as banks, have
generally been required to process payments by the end of the
following business day, giving a very limited timeline to
investigate and alert relevant parties to possible fraud.
Today’s legislation will give payment service providers a further
72 hours to investigate payments, but only where there are
reasonable grounds to suspect fraud or dishonesty and more time
is needed to contact the customer or other parties like law
enforcement. The legislation has been designed to minimise any
impact on legitimate payments.
The government intends to lay this legislation before parliament
so that it comes into force by October 7th 2024.
Economic Secretary to the Treasury , said:
“Fraudsters spin whole webs of lies and fabricate all sorts of
things to convince people to send them money – this legislation
will give banks, other payment service providers and law
enforcement more time to get in touch with victims and break the
fraudster’s spell before money is sent.
“The government is absolutely committed to tackling fraud and
recognises the impact of this devastating crime on victims – this
legislation is another tool in our arsenal to fight fraud.”
As part of the summit, yesterday (11 March) Home Secretary met with ministers from
across the G7, Five Eyes, Singapore and South Korea for the first
ever Global Fraud Summit.
Each attending nation agreed to a communique which has committed
to more collaboration between law enforcement agencies, to
protect the public and fight fraudsters.
The summit continues today, with a series of working level
meetings between the private sector, civil society and government
officials.
