Posted By Uma Rajagopal
Posted on October 3, 2024
LONDON (Reuters) – Britain is giving banks enhanced new powers to delay and investigate suspicious payments in a bid to slash the estimated 460 million pounds ($610 million) lost to fraud in the last year.
New laws proposed by the UK finance ministry on Thursday will enable banks to pause transactions for up to 72 hours where there are reasonable grounds to suspect a payment is fraudulent. Currently, banks must either process or refuse a payment by the end of the next business day.
Hundreds of millions of pounds are lost to scammers each year, targeting vulnerable communities and ruining the lives of ordinary people,” Economic Secretary to the Treasury Tulip Siddiq said 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 said so-called ‘romance scams’ – in which fraudsters coax large amounts of cash from vulnerable people after faking a romantic connection – have increased instances of fraud, which now accounts for over a third of all crime in England and Wales.
Ben Donaldson, managing director of economic crime at trade body UK Finance, said the additional time would allow payment service providers to contact customers at risk.
This could potentially limit the psychological harms that these awful crimes can cause and stop money getting into the hands of criminals,” he said.
($1 = 0.7540 pounds)
(Reporting by Sinead Cruise; Editing by Sandra Maler)
