The Economic Secretary to the Treasury will today (12th March) publish draft legislation which announces new measures to “break the spell” of fraudsters, as part of the UK Government’s Global Fraud Summit.
Under draft legislation published today, payment service providers such as banks will be given more time to contact customers, police, and other relevant parties when they have reasonable grounds to suspect fraud or dishonesty before they send a payment. This gives them a better chance of stopping money being sent to fraudsters.
This legislation will apply to authorised push payments, subject to limited exceptions. The UK has seen an increase in authorised push payment fraud over the past few years – in 2022 victims lost £485m to these scams.
Push payment fraud involves the fraudster deceiving the victim into initiating and authorising a transaction, such as instances of romance fraud where fraudsters have convinced their victim of a romantic attachment, or investment fraud.
Until now, payment service providers, such as banks, have generally been required to process payments by the end of the following business day, giving a very limited timeline to investigate and alert relevant parties to possible fraud.
Today’s legislation will give payment service providers a further 72 hours to investigate payments, but only where there are reasonable grounds to suspect fraud or dishonesty and more time is needed to contact the customer or other parties like law enforcement. The legislation has been designed to minimise any impact on legitimate payments.
The government intends to lay this legislation before parliament so that it comes into force by October 7th 2024.
Economic Secretary to the Treasury Bim Afolami, said: “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 get in touch with victims and break the fraudster’s spell before money is sent.
“The government is absolutely committed to tackling fraud and recognises the impact of this devastating crime on victims – this legislation is another tool in our arsenal to fight fraud.”
As part of the summit, yesterday (11 March) Home Secretary James Cleverly met with ministers from across the G7, Five Eyes, Singapore and South Korea for the first ever Global Fraud Summit.
Each attending nation agreed to a communique which has committed to more collaboration between law enforcement agencies, to protect the public and fight fraudsters.
The summit continues today, with a series of working level meetings between the private sector, civil society and government officials.
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