In an effort to protect consumers from scammers, the UK government has announced new proposed legislation that would grant banks extended powers to delay and investigate suspicious payments.
Under the new regulations, banks will be allowed to hold potentially fraudulent transactions for up to 72 hours, giving them crucial time to investigate and potentially prevent millions of pounds from falling into the hands of criminals. Current regulations require banks to process or refuse payments by the end of the next business day. The proposed changes provide an additional three days for banks to analyze and identify suspicious transactions, potentially breaking the manipulative “spell” that fraudsters often use to deceive their victims.
Government Support for Fraud Prevention
Economic Secretary to the Treasury, Tulip Siddiq, emphasized the importance of the measures, saying, “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.
The new measures come in response to an alarming rise in fraud cases across England and Wales. Last year alone, an estimated £460 million was lost to fraud, making it the most prevalent form of crime in the country, responsible for one-third of all reported offenses. Authorities attribute the surge partly to an increase in online purchase scams and the emergence of “romance scams,” where criminals exploit vulnerable individuals by feigning romantic interest to facilitate large money transfers.
Minister of State with Responsibility for Fraud, Lord Sir David Hanson, highlighted the significance of the new powers for banks, stating, “Fraud is a crime that can devastate lives,” and adding that the new regulations are critical to combating the growing issue.
Stakeholder Support for New Powers
Consumer advocacy groups and banking industry representatives have welcomed the proposed legislation. Rocio Concha, Director of Policy and Advocacy at [Organisation], stated, “This new measure will provide banks with the tools they need to stop fraudsters in their tracks. It is an important step in improving consumer protection.
As the government works to finalize the legislation, banks are expected to enhance their internal fraud prevention systems, ensuring they use these new powers effectively to protect consumers. The proposed measures are expected to help stem the rising tide of financial fraud and safeguard vulnerable customers from increasingly sophisticated scams.
For individuals concerned about fraud, experts advise staying vigilant, questioning unsolicited requests for money, and reporting suspicious activity to their bank as soon as possible.
