UK Grants Banks Extended Powers to Delay Suspicious Payments in Fight Against Fraud

Britain is granting banks new powers to delay and investigate suspicious payments, aiming to reduce the £460 million ($610 million) lost to fraud in the past year. New laws, proposed today by the UK finance ministry, will allow banks to pause transactions for up to 72 hours if they have reasonable grounds to suspect that a payment is fraudulent.

Currently, banks are required to either process or reject a payment by the end of the next business day, leaving little time to investigate potential scams.

“Hundreds of millions of pounds are lost to scammers each year, targeting vulnerable communities and ruining the lives of ordinary people,” said Tulip Siddiq, Economic Secretary to the Treasury, in a statement. “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,” she added.

The UK finance ministry pointed out that ‘romance scams’—where fraudsters convince vulnerable people to part with large sums of money by faking romantic relationships—are one of the driving factors behind the rise in fraud, which now represents over a third of all crime in England and Wales.

Ben Donaldson, managing director of economic crime at trade body UK Finance, welcomed the new measures, stating that the additional time would help payment service providers to alert at-risk customers. “This could potentially limit the psychological harms that these awful crimes can cause and stop money getting into the hands of criminals,” Donaldson said.

The new powers mark a significant step in the UK's efforts to combat financial fraud and protect vulnerable individuals from falling victim to scams.

By fLEXI tEAM