Banks will be given new powers to delay and investigate payments
that are suspected of being fraudulent, helping to protect
consumers against scammers.
New laws proposed by the Government today will extend the time
that payments can be delayed by 72 hours where there are
reasonable grounds to suspect a payment is fraudulent and
more time is needed for the bank to investigate.
This will give banks more time to break the spell woven by
fraudsters over their victims and tackle the estimated £460
million lost to fraud last year alone.
Economic Secretary to the Treasury, said:
Hundreds of millions of pounds are lost to scammers each year,
targeting vulnerable communities and ruining the lives of
ordinary people.
We need to protect these people better, which is why we are
giving banks more time to investigate suspicious payments and
break the criminal spell that scammers weave.
Minister of State with Responsibility for Fraud, Lord Sir
said:
Fraud is a crime that can devastate lives, and anyone can be
affected.
That's why measures like this are so crucial to provide banks the
investigative powers they need to better protect customers from
this appalling crime.
Fraud accounts for over a third of all crime perpetrated in
England and Wales, making it the most prevalent form of crime
commitment in the country. This has been driven by a growing
number of purchase scams and the emergence of so-called ‘romance
scams', where victims target vulnerable people and trick them
into transferring large amounts of money by pretending to be
interested in a romantic relationship.
The new rules will help protect people against these types of
scams by allowing banks up to an additional 72 hours to
investigate suspicious payments. Currently banks must either
process or refuse a payment by the end of the next business day.
Which? Director of Policy and Advocacy, Rocio
Concha said:
This is a positive step in the fight against fraud. While it
should not affect the vast majority of everyday payments, it's
important that banks can delay a bank transfer and take action if
they think a customer is being targeted by a scam.
These measures should be used in a careful and targeted way.
Financial firms of all sizes should also ensure they share
intelligence and work with the police and other authorities to
shut down accounts used for fraud and pursue the criminals behind
them.
UK Finance Managing Director of Economic Crime, Ben
Donaldson said:
UK Finance has long called for firms to be allowed to delay
payments in high-risk cases where fraud is suspected, and we
are delighted to see proposed new laws supporting this.
This could allow payment service providers time to get in
touch with customers and give them the advice and support they
need to avoid being coerced by the criminals who want to steal
their money. This could potentially limit the psychological harms
that these awful crimes can cause and stop money getting into the
hands of criminals.
Banks who have reasonable grounds to suspect a payment is
fraudulent will need to inform customers when a payment is being
delayed. They will also need to explain what the customer needs
to do in order to unblock the payment.
The need for evidence to trigger a delay will help protect people
and businesses from unnecessary payment delays. Banks will also
be required to compensate customers for any interest or late
payment fees they incur as a result of delays.
