The UK government has taken a step to combat the growing menace of APP fraud, which has seen victims lose a staggering £485m in 2022 alone.
According to Finextra Research, a new draft bill, announced at a global fraud summit, is set to give UK banks an additional 72 hours to delay payments if there’s a suspicion of APP fraud. This move, aimed at providing banks with more flexibility to investigate suspected fraudulent transactions, marks a departure from the current requirement for banks to process payments by the next business day.
City minister Bim Afolami highlighted the deceptive tactics employed by fraudsters, stating, “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 urgency of this measure is underscored by the alarming rise in APP scams, prompting the government to act swiftly to protect consumers and their finances.
Scheduled for passage into Parliamentary law by early October, the bill also integrates recommendations from the Payment Systems Regulator. Notably, it includes provisions for reimbursing victims of APP fraud for losses up to £450,000, covering the vast majority of money lost to these scams. This legislative move is a clear indication of the government’s commitment to enhancing consumer protection in the financial sector, particularly against the backdrop of increasingly sophisticated online fraud schemes.
The introduction of this draft bill is a critical development in the fight against financial fraud in the UK. By allowing banks additional time to investigate suspicious transactions, the government aims to significantly reduce the incidence of APP fraud, providing a much-needed layer of security for consumers.
City minister Bim Afolami, during his speech at the global fraud summit, underscored the importance of the legislation: “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.”
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