UK to introduce drastic new banking rules that could delay your payments by 72 hours
Major changes to the United Kingdom's banking sector could result in payments being delayed by up to 72 hours.
The government is behind the shift, saying that payments could be stalled by a total of three days as a result of new powers being given to banks.
There has to be 'reasonable grounds' when it comes to delaying payments, with fraudulent activity suspected.
The time is then used by the bank to investigate what they suspect to be proceeds of crime.
Advert
The new laws proposed by the UK Government were unveiled today (3 October), with ministers saying it was a way to stop fraud from 'devastating lives'.
As a result of the change, banks will be able to break the 'spell woven' by fraudsters over their victims, the government says.
It also says it will tackle the estimated £460 million lost to fraud last year alone, so that the amount lost out on for 2024 and beyond will be significantly less.
What do the experts say about the banking change?
Economic Secretary to the Treasury, Tulip Siddiq said: "Hundreds of millions of pounds are lost to scammers each year, targeting vulnerable communities and ruining the lives of ordinary people.
"We need to protect these people better, which is why we are giving banks more time to investigate suspicious payments and break the criminal spell that scammers weave."
Minister of State with Responsibility for Fraud, Lord Sir David Hanson, said: "Fraud is a crime that can devastate lives, and anyone can be affected.
"That’s why measures like this are so crucial to provide banks the investigative powers they need to better protect customers from this appalling crime."
What happens if my payment is delayed and I miss a deadline?
Don't stress if this happens to you.
Under the new rules, banks will have to compensate you if you make a late payment as a result of the delay. This will be in the form of cash equivalent to the interest or late payment fee charged to you.
You should also contact the bank and, if applicable, the creditor (such as a phone contract or mortgage) in question so as to make sure you don't get a strike on your credit score.
Why have some payments been extended to 72 hours?
Something called 'purchase scams' has fuelled the extension.
This is where a person pays for a product that will never arrive or has never existed.
Romance scams have also influenced this, where vulnerable people looking for love or companionship are targeted by people pretending to be romantically involved with them.
Tom Earnshaw