The UK government has announced new draft legislation aimed at combating fraud in bank transfers, particularly focusing on authorised push payment (APP) fraud, which has seen victims lose £485 million in 2022. Under the proposed rules, banks will be allowed an additional 72 hours to scrutinize transactions for signs of fraud, extending the current 24-hour processing period. This initiative intends to give financial institutions and law enforcement more time to detect and prevent fraudulent activities, protecting vulnerable individuals from scams.

Economic Secretary to the Treasury, Bim Afolami, highlighted the importance of this legislation in providing banks with the necessary time to protect consumers from fraudsters. The Payment Systems Regulator (PSR) is also set to introduce new consumer protections against APP fraud from October 7, including a maximum reimbursement cap of £415,000 per claim. These measures are part of a broader effort to enhance fraud prevention efforts and ensure victims are reimbursed for their losses.

Fraudulent tactics often involve deceit, such as posing as legitimate entities or loved ones to trick victims into making significant payments. The upcoming legislation, expected to become law by October 7, aims to counteract such schemes by allowing banks more latitude to delay suspicious transactions, thereby combating the rise in APP fraud and offering better support to customers.

The initiative has been welcomed by UK Finance and is set to be a key topic at a global fraud summit in London, where Bim Afolami will detail the UK’s dedication to tackling financial crimes and safeguarding citizens from potential scams.