The UK government has allowed banks the power to pause payments for up to four days to give them more time to investigate fraud. Currently, transfers must be processed or declined by the end of the next business day. Under the new law, they 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. Bank payments could be delayed by up to three days under new rules that would give banks more time to investigate potential fraud ✍️: @annawisey https://t.co/Y1GM88FwCc — PA Media (@PA) October 3, 2024 According to the BBC, long-proposed new regulations will come into force at the end of October - later than originally planned.
The previous government's draft legislation had proposed giving banks the new powers by October 7, but now they will take effect from the end of the month. Fraud is the most common offence in the country. 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. Some, however, have resisted the change. Recommended reading: Royal Mail stamp price increase from next week announced US sues Visa alleging card issuer monopolis.