Banks will have the power to pause payments for up to four days to give them more time to investigate fraud, the government has said.
Currently, transfers must be processed or declined by the end of the next business day, but the new law will allow an extension of three more days.
For years, banks have needed to have reasonable grounds to suspect fraud before being able to investigate but have also faced pressure from customers who want payments to be made instantly.
The long-proposed new regulations will come into force at the end of October – later than originally planned.Fraud is the most common offence in the country, accounting for a third of all crime in England and Wales.
Criminals have stolen billions of pounds through romance scams or by impersonating a genuine trader to trick victims into transferring money.
Banks have lobbied for permission to take longer to agree to payments, to allow them to investigate suspicious transfers.
The new law will give them time to look at unusual spending patterns, contact a customer, and investigate further before the money is transferred.
Ben Donaldson, managing director of economic crime at UK Finance, which represents the banking industry, thinks the new law will be used “fairly sparingly”.
“This is really relevant to cases of investment fraud and romance fraud where there is psychological manipulation of the victim,” he told the BBC’s Today programme.
Source: BBC
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