June 17, 2021, 5:29

    Bank payments are changing for millions – new fraud rules and how it works explained

    Bank payments are changing for millions – new fraud rules and how it works explained

    New measures to help combat bank fraud are coming into force, and banks and building societies are encouraging customers to check their contact details now ahead of the rule change.

    Under new safety checks, both debit and credit card providers will be required to verify online payments with customers from September, with a £25 trigger in place to detect 'abnormal' transactions.

    It’s part of the 'Strong Customer Authentication (SCA)' rollout which banks, such as Santander, have been phasing in since last year.

    The SCA process will become an official measure from September 2021, but the FCA has been ramping up preparations for it since June 1 – meaning some customers will have to follow the new measures as early as this month.

    HSBC, for instance, told The Mirror customers will be asked to confirm their online card payments more often, from June 1, 2021.

    The latest safety checks follow on from new security checks for payees last year, when 'confirmation of payee' came into force.

    It means lenders and loan providers will start contacting customers more frequently to verify that the payment is legitimate.

    It will protect you if you are targeted by a scammer
    (Image: Getty)

    In the worst case scenario, if the company cannot contact you to vet it, the payment or transfer could be declined or blocked.

    The rules are due to come into force on September 2021, but from this month, the Financial Conduct Authority (FCA) is already contacting lenders to check whether they have provisions in place for the rule change.

    Trade association UK Finance told The Mirror it has been ramping up this rollout since June 1, 2020 – which means many people may have already received notifications.

    That means some lenders could introduce them sooner – so it’s worth checking your details to ensure home addresses, emails and contact numbers are all correct.

    It comes after figures from UK Finance show over £1.2billion was lost to fraud in 2019, with payment card scams and push payment fraud accounting for £824.8million in losses.

    What are the new fraud checks?

    From March 14, 2022, verification will be required for the majority of online payments over £25 unless they are considered ‘low risk’ such as your usual supermarket shop at the same store or a frequent utility payment.

    Online payments under £25 will need to be verified if you have made multiple payments in a row totalling more than £85. This is to ensure it is you – and not someone that has accessed your account.

    Account holders will also need to verify themselves when setting up new recurring payments (made using your card number) or modifying existing ones.

    Your usual online transactions under £25 will not require security checks, and direct debits such as your phone bill, which is a form of recurring payment, will not need to be verified each month.

    Customers may also need to verify themselves in stores.

    For example, you may be asked to verify the transaction or enter your pin if you have made multiple contactless payments in a row totalling more than £130.

    Bear in mind that banks can flag anything they consider ‘unusual’ at any point, so make sure your details are up to date just in case they need to contact you.

    How will my bank, building society or card issuer contact me?

    Security checks could mean a text from your bank with a verification code. Some banks such as Santander already do this via their online banking app or text message. In this scenario, you will be asked to enter the verification code sent to your phone online on the payment screen.

    HSBC, for example, will start asking customers to verify their payments through the HSBC UK Mobile Banking app or via a code sent to a customer’s mobile phone (SMS) from this month.

    Others may ask you to log in to their app or online banking website to verify that it is you.

    If you were given a card reader when you registered for online banking, you may be asked to use that to approve the payment.

    If you do not have a smartphone, your lender may make an automated call to your landline.

    If your card provider can't reach you to verify transactions, your payments may be blocked, so it's important to ensure providers have your up-to-date contact details.

    A warning

    Your bank will never ask for your pin or bank account number out of the blue – and most certainly not via email or text message.

    If you receive a verification check but are worried it may not be genuine, contact your lender using the number on the back of the card instead.

    Never click on unsolicited links in texts and emails – as some of these may direct you to a clone website.

    Sourse: mirror.co.uk

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