LONDON – Banks in Britain will be allowed to hold up payment transfers for an extra three days if they have grounds to suspect a customer is being conned by fraudsters, the Finance Ministry said on March 12.

Regulators are cracking down on “authorised push payment” fraud, or when scammers trick people into transferring money to them.

The ministry said it will publish draft legislation on March 12 to give payment services providers, such as banks, a further 72 hours – on top of the current deadline of end of next business day – for processing a payment if there are reasonable grounds for suspecting fraud or dishonesty.

This gives banks a better chance of stopping money being sent to fraudsters, the ministry said, adding that the new rule will be in force by Oct 7.

The start date coincides with action being taken by the Payment Systems Regulator to require banks and other payment firms to reimburse customers hit by push payment fraud to a maximum of £415,000 (S$707,700) starting from October, split between the sending and receiving banks.

Britain has seen an increase in authorised push payment fraud over the past few years, with victims losing £485 million to these scams in 2022, the ministry said. REUTERS