BANKS TO BE HANDED NEW POWERS FOR FRAUD PREVENTION – From this autumn, banks will be able to freeze payments for up to four days
Banks will be handed new powers to freeze payments for up to four days under new fraud prevention rules from this autumn.
The rules are being introduced ahead of a new fraud regime on Oct 7, that will require banks to pay back almost all victims of “Authorised Push Payment” or “APP” fraud, which cost consumers £460m last year.
Currently, “authorised” payments – ones that have been approved by the customer – can only be held for 24 hours while banks investigate.
The legislation, first proposed by the Conservatives and backed by Labour in January, will be pushed through Parliament this autumn, a Treasury source confirmed.
The 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 that could be out of the ordinary from a customer’s regular financial activity.
When the legislation was first announced, the then city minister Bim Afolami said it was “another weapon in our arsenal to tackle fraud”.
