Banks will be granted new powers to delay and investigate payments suspected of fraud, enhancing consumer protection against scammers.
Under new laws being proposed by the Government, banks will be able to extend the maximum delay for suspicious payments by up to 72 hours when there are reasonable grounds to suspect a payment is fraudulent and additional time is needed for investigation. Under the current regulations, banks are required to either complete or reject a payment by the close of the next business day.
This extended time frame will allow banks more opportunity to disrupt fraudsters' influence over their victims and help combat the estimated £460 million lost to banking fraud in the last year.
The Economic Secretary to the Treasury, commented:
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.
Banks that have reasonable grounds to suspect a payment is fraudulent will be required to notify customers when a payment is delayed as well as to provide instructions on what actions the customer needs to take to unblock the payment. Banks will also be obligated to compensate customers for any interest or late payment fees incurred due to payment delays.
