Banks to be able to hold suspicious payments for 4 days

MattMattMattUK

This is as we all expected the outcome of making the banks liable for customers stupidity, they are obviously going to want to protect themselves from the risk of being liable for those costs. 

Nasqueron

friolento said:

Dreadful. A massive backwards step.

I agree, sites like this have made it so the most greedy person falling for the most obvious scam is able to get a refund in full or part out of bank money, no wonder banks will look to protect their money by stopping people. It will cause problems with switch stuff when you might need to move £500-£1500 to a brand new account for the bonus but have to wait around for it and then try and get the money back meaning you're out of pocket (e.g. for interest) for perhaps a week!

Ergates

This will be inconvenient, but given banks are now forced to repay fraudulent payments, I can't think of a solid argument against it.  It's an obvious consequence.

friolento

Ergates said:

This will be inconvenient, but given banks are now forced to repay fraudulent payments, I can't think of a solid argument against it.  It's an obvious consequence.

They have had to repay for some time. What’s new is that the receiving bank now needs to pay 50% of the refund, and that there is now a limit of £85k, whilst previously it was unlimited.

No real reason for introducing an additional 4-day delay, particularly not in the AI age, where less human interaction and intervention is needed (or so we are told).

But yes, it’s all due to a few feckless people who have still not heard about fraudsters, and due to some fraudsters who think they can outsmart banks.

GeoffTF

njm123 said:

Fine so long as 

a) They compensate for any loss - i.e. missing out on a purchase, missing chance to open higher rate saving account, surcharges from tradesmen/businesses for late payment or inconvenience to the business.

They need evidence to delay a payment beyond a day. They have to keep you informed. They have to compensate you for any lost interest and/or late payment penalties. That does not look too bad to me. It is better than it was before Faster Payments was introduced. I expect that some banks will be better than others, and that customers' experiences will vary, but that was always the case.

Ergates

friolento said:

Ergates said:

This will be inconvenient, but given banks are now forced to repay fraudulent payments, I can't think of a solid argument against it.  It's an obvious consequence.

They have had to repay for some time. What’s new is that the receiving bank now needs to pay 50% of the refund, and that there is now a limit of £85k, whilst previously it was unlimited.

No real reason for introducing an additional 4-day delay, particularly not in the AI age, where less human interaction and intervention is needed (or so we are told).

But yes, it’s all due to a few feckless people who have still not heard about fraudsters, and due to some fraudsters who think they can outsmart banks.

Multiple banks were signed up to a voluntary agreement to repay customer, now they are legally compelled to do so.

AI is good at spotting when things don't conform to an expected payment pattern - i.e. identifying suspect transactions, but it cannot (yet!) carry out the investigations to confirm if the payment is legit - e.g. phoning up customers to ask them.

etienneg

It's easy to see the problem from the bank's point of view, but things have been getting better for the customer since the old days when payment was typically by cheque which took three days to clear, even after delays due to the post and getting to the bank to pay the cheque in.

So we need a better solution rather than just a customer v bank argument.

For some things you know well in advance that a payment will be necessary, and approximately how much, but the fine detail has to wait until the time you want to make the payment. (I'm thinking, for example, about buying a car, or a house!) How about a system that gives warning to the bank in advance, so that checks could be carried out before the payment is made?

Some years ago, banks asked customers to warn them when you were going on holiday abroad, as expenditure is then obviously unusual. But now few (if any) do this, claiming their algorithms are quite able to deal with this. (Oh, yes?) So I'm not holding my breath that such a system will happen, but we do need to think more broadly for a sensible discussion.

eskbanker

For anyone interested in the detail about how this may be handled, i.e. the basis on which payments can be delayed, etc, the FCA are still consulting about their proposed guidance, even though this won't be published until a couple of months after the legislation is enacted:

https://www.fca.org.uk/publication/guidance-consultation/gc24-5.pdf

Shakin_Steve

boingy said:

Unfortunately I think we'll see even longer delays and frustrations to many legitimate transfers, made much worse by the near-certainty that banks won't take on any extra staff to deal with the extra workload. It took me just over 1 hour on hold to contact the Co-op about a blocked payment. I had another recently with a different bank where they texted me to ask "Is this payment OK?" and when I texted back "Yes" they immediately phoned me, but it was their automated system that phoned me then played me a recorded message and then put me in a bloody queue! 20 minutes later I hung up, because I had to go out.

If they are not careful we'll all go back to writing cheques to ourselves to transfer money between accounts.

Yes, if every payment that is held up for up to four days has to be looked at by a human, I can't see how they'll manage with the existing staffing levels. So...will suspicious (to the bank) payments end up taking longer than four days, or will they go through after four days without actually being checked due to lack of staff?

NorwichMan

I don't really understand how we got to a situation where it's considered that the banks are responsible to refund customers who have been tricked into sending money to fraudsters. Surely it is the fraudsters who are responsible first, and perhaps also customers who do not take reasonable care (or who might in some cases be working with the fraudster, claiming to have been tricked and then requesting a refund)?

In cases where the bank has been negligent or at fault in some way then yes they should be liable. But when they ask "are you really sure" and the customer says yes go ahead, then later says "I was tricked," I am not sure why this is considered to be the banks fault.

Maybe I might feel differently if I had been a victim. Certainly I would be glad to get refunded. But I would probably still consider it to be unfair on the banks, and on everyone else who would pay indirectly (through lower interest etc).

It's like we are all being signed up to an insurance scheme to compensate victims, without being able to opt out. Does this do anything to discourage the fraudsters?