A recent warning has been issued regarding potential delays in bank payments under new regulations that grant banks additional time to investigate fraud. The proposed laws aim to extend the duration within which payments can be halted by up to 72 hours. Presently, a bank is required to either process or reject a payment made by a customer by the end of the subsequent business day.
This extension in the timeline will provide banks with a greater opportunity to probe transactions flagged as suspicious, potentially intercepting any high-risk payments. Tulip Siddiq, the economic secretary to the Treasury, emphasised the need for enhanced protection against scammers who cause significant financial losses to individuals annually.
Rocio Concha, the director of policy and advocacy at consumer group Which?, hailed these proposals as a positive advancement in the ongoing battle against fraud. While the majority of routine payments are not expected to be affected, banks will now have the capacity to postpone a bank transfer and intervene if a customer is believed to be a target of a scam. Such measures are to be employed judiciously and selectively.
Upon discovering evidence suggesting fraudulent activity, a bank must notify customers of a delay and provide instructions for resolving the issue. Additionally, banks will be obligated to reimburse customers for any interest or late payment charges incurred due to these delays. The primary objective of these changes is to safeguard individuals against authorised push payment (APP) fraud, wherein victims are coerced or deceived into transferring funds to fraudsters.
Instances of purchase scams, involving payment for goods or services never received or found to be counterfeit, are escalating, alongside romance scams. Romance scams exploit vulnerable individuals, who are manipulated into transferring substantial sums by fraudsters feigning romantic interest. These evolving tactics underscore the necessity for heightened vigilance and preventative measures within the banking sector.