UK proposes new laws to crack down on push payment fraud
New legislation to crack down on push payment scams via banking apps will be brought to parliament, the government has announced today.
The government is set to bring forward a draft bill aimed at tackling fraudsters who operate by convincing scam victims to authorise so-called push payment transactions in banking apps.
It follows the Global Fraud Summit that kicked off on Monday, with execs from Apple, Google and Amazon in attendance.
The proposals would give banks an additional 72 hours to investigate authorised payments and contact customers, the police and law enforcement where they have reasonable grounds to believe fraud, such as a romance or investment scam, could be taking place. Until now banks have generally been required to process payments by the end of the following business day.
City minister 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 UK has seen a recent rise in push payment fraud, with victims losing £485m in 2022.
It involves a scammer deceiving the victim into making and authorising a transaction, which banks are currently obliged to process before the end of the next business day.
The government “is absolutely committed to tackling fraud and recognises the impact of this devastating crime on victims,” Afolami added.
Legislation is expected to come into force by October 7, 2024, the Treasury said.
At the Global Fraud Summit, which continues today, home secretary James Cleverly met ministers from the G7, South Korea, Singapore and the ‘Five Eyes’ security partnership comprising the UK, New Zealand, Australia, Canada and the United States.
The states agreed to a joint summit pledge to commit to increased collaboration between law enforcement agencies, to protect the public and fight fraudsters.