UK banks will have an additional 72 hours to halt payments if they suspect authorized push payment (APP) fraud.
The UK Government has announced plans to introduce a draft bill targeting APP fraud, which involves customers being deceived into sending money to scammers. This initiative comes in response to a disturbing rise in APP scams, which resulted in victims losing £485 million in 2022.
The extended timeframe for processing payments aims to provide banks with more opportunities to investigate suspicious transactions. Previously, banks were generally mandated to process payments by the end of the next business day.
At a global fraud summit organized by the Government, City minister Bim Afolami remarked: “Fraudsters spin whole webs of lies and fabricate all sorts of things to convince people to send them money. This legislation will give banks, other payment service providers, and law enforcement more time to reach out to victims and disrupt the fraudster’s tactics before any money is transferred.”
Expected to become Parliamentary law by early October, the draft bill will also include recommendations from the Payment Systems Regulator, ensuring that the majority of losses—up to a maximum of £450,000—due to APP fraud will be reimbursed to victims.