New banking anti-fraud rules explained: why some online payments could be blocked - and when changes start

The new rules mean more checks will be required for certain payments

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People who have not updated their bank details could see online payments declined from next week when new anti-fraud rules begin.

The new measures, under Strong Customer Authentication (SCA), will come into force on 14 March to stop fraudsters and online scams.

More verification will be needed when making online payments to prove your identity - here’s everything you need to know about the new anti-fraud rules.

What are the new anti-fraud rules?

The new rules mean more checks, such as a text or call to your mobile, will be required for certain payments.

For example, you may be sent a one-time code by your bank to prove your identity when making an online purchase.

Or you could also be asked to log into your bank’s app to verify your spend.

SCA will be required for almost all online purchases above £25, UK Finance said.

Multiple low-value payments could also require verification.

The new rules mean it is important for customers to keep their contact details up to date with their bank, so they have a means to contact you if you need to verify a payment.

Otherwise you could risk having payments declined or blocked if your bank can’t carry out its checks.

When do the rules start?

The new rules start from 14 March, however, you may have noticed the extra security checks already, as some card issuers began implementing SCA checks from 18 January in preparation for the full rollout.

The rules were introduced by the Financial Conduct Authority (FCA) and were due to be enforced from September 2021 but were delayed due to the Covid pandemic.

Mastercard says it expects about 25% of online transactions to require some form of extra verification.

When is extra verification not needed for purchases?

Exemptions for when the extra security is not needed include non-electronic payments such as cheques, direct debit payments, and mail and telephone orders.

For regular payments, such as Netflix subscriptions, SCA won’t be required every time but it may be needed the first time the payment is set up.

Customers may also be able to add sellers to a “trusted beneficiary” list in the future, meaning they won’t need to go through SCA when buying from that organisation.

However, providers such as Royal Bank of Scotland, NatWest, Santander and Nationwide, have said they will not be offering this.

It is also worth noting that each bank will also have a different definition of what counts as a "risky" transaction - so not all lenders will run the same checks for the same purchases.

What has Martin Lewis urged people to do?

The MoneySavingExpert, Martin Lewis, urged Brits last year to check their contact details with their bank before the fraud protections come in.

It came after consumer group Which? warned that those without a mobile phone, or a signal at home, risk having payments declined if they can’t verify their online purchase.

Customers who don’t have a smartphone will be offered other ways of verifying their purchase.

For example, most banks will offer the option of email or an automated message to your landline.

Why are the rules being implemented?

Jana Mackintosh, the managing director of payments at UK Finance which represents the banking industry, says: “Fraud is a growing problem, with criminals stealing more than £750million in the first half of 2021 alone.

“That is why it is more important than ever that additional protections like SCA are put in place.”

She added: “For retailers, implementing SCA will provide customers peace of mind that payment processes are more secure.”

When receiving phone calls from someone who you believe is your bank it is important to stay vigilant.

Be wary of calls you weren’t expecting and remember.

Your bank will never ask you for your PIN number or full password, even as part of the new SCA rules.

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