New anti-fraud banking rules ‘will delay property sales’
There are concerns that the new banking anti-fraud measures will cause housing transaction delays as banks try to stop online scammers.
From the end of October 2024 UK banks will be able to hold suspicious payments for up to four days leading to fears that large-scale transactions in property purchases could be regularly blocked.
The change is part of The Payment Services (Amendment) Regulations 2024 which came into force earlier this month under which banks must now refund scam victims up to £85,000 within five days.
When a transaction is flagged as unusual, banks will look at spending patterns, contact the customer, and investigate further before monies are transferred.
Even a small number of delayed payments could have a large knock-on effect for movers.”
The payment delays are designed to deter financial scammers, including those who target the property market aiming to con people into transferring their deposit or purchase funds to them.
According to Propertymark, scams are becoming increasingly sophisticated, with criminals often posing as lawyers or conveyancers to win customers’ trust and trick them into giving up their cash.
Propertymark says small and medium-sized businesses, such as smaller estate agencies, are particularly vulnerable to payment diversion fraud, where the perpetrator targets a specific individual, impersonates others, creates or amends invoices and diverts payments to criminal-controlled bank accounts.
Sledgehammer to crack a nut?
The agent body does though question whether the new measures are a ‘sledgehammer to crack a nut’ saying: “Fraud cases are on the rise, and when they happen it is a serious matter, and undeniably distressing for those affected. However, fraudulent transactions represent a tiny percentage of the business.
“In the home buying and selling market, it is increasingly common for completion and exchange to happen on the same day, so even a small number of delayed payments could have a large knock-on effect for movers.”
Propertymark says it will monitor the implementation and contact stakeholders to share any evidence of unintended consequences. Agents who experience any problems because of the changes should contact the Policy and Campaigns Team at [email protected].
