So the U.K. Parliament is at it again, this time recommending that a voluntary consumer faster payment fraud reimbursement scheme be made compulsory, retroactive to 2016.
An article in Finextra covers some of the discussion from the U.K. parliament Treasury Committee that coincide with a Confirmation of Payee system, which will cross reference payee names with account numbers and sort codes.
‘A new voluntary code to reimburse UK customers who fall victim to authorised push payment (APP) fraud should be made compulsory and applied retropectively, says the Treasury Committee. MPs have also called for a 24-hour delay on a subset of Faster Payments transactions to give people the chance to consider if they are being defrauded….In the first half of this year, over £600 million was stolen from Brits, with consumer group Which? warning that losses from money transfer scams are ‘spiralling out of control’.’
There is also discussion of 24 hour delays in all first time payments, in order for consumers to decide whether or not someone might be trying to defraud them. I’m not sure why this is any different from someone just simply making sure who they are paying, essentially a self-delay. Is a 24 hour forced delay going to accomplish something?
Seems a bit nonsensical or big brother-ish, so to speak. In any event, the piece indicates that GBP 600 million has been fraudulently taken already during the first half of this year. It seems that social engineering tactics are the main cause. If one does a simple calculation and takes 600 million x 2 (this year) x 2 (previous 2 years), this produces roughly GBP 3.6 billion in back liabilities (less whatever certain banks may have reimbursed voluntarily).
‘Rushanara Ali MP, Treasury Committee, says: “The Government and regulators should take on board all of the Committee’s recommendations to enhance consumer protection in the face of this harmful tide of criminal activity.”
There does not seem to be any equivalent action in B2B, which would be quite interesting. We have discussed ‘faster payments – faster fraud’ from the corporate payments perspective quite frequently in various research pieces. We’ll keep tracking developments.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group