Strong Customer Authentication (SCA) rules went into effect on March 14, aiming to provide a greater layer of security to stop fraudsters spending your money
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Shoppers face tougher anti-fraud checks for online purchases from today as new verification rules finally come into effect.
But the enhanced security risks mean you could risk your payment being declined if your bank is unable to contact you to confirm your identity.
The so-called Strong Customer Authentication (SCA) rules went into effect on March 14, with the aim of providing a greater layer of security to prevent fraudsters from spending your money.
Essentially, the new measures mean that more checks, such as an SMS or a call to your mobile, will be required for certain online payments.
UK Finance, which represents the banking industry, says SCA will be activated for almost all online purchases over £25.
Multiple low value payments could also result in a verification request.
Exemptions where additional security will not be required include non-electronic payments such as checks, direct debits, and mail and telephone orders.
For regular payments, such as Netflix subscriptions, SCA will not be required every time, but may be required the first time the payment is set up.
Customers will also be able to add sellers to a list of “trusted beneficiaries” in the future, meaning they won’t need to go through SCA when purchasing from this organization.
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However, many providers, such as Royal Bank of Scotland, NatWest, Santander and Nationwide, said they would not offer this.
Each bank will also have a different definition of what counts as a “risky” transaction – so not all lenders will perform the same checks on the same purchases.
The new rules mean it’s important customers keep their contact details up to date with their bank, so they have a way to contact you if you need to verify a payment.
In the worst case, you risk having your payments refused or blocked if your bank cannot carry out its checks.
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Last year, Martin Lewis urged Britons to check their details with their bank before fraud protections came into effect.
Customers who don’t have a smartphone will be offered other ways to verify their purchase. For example, most banks offer the option of sending an automated email or message to your landline.
It comes after the consumer group Which? warned that those without a mobile phone or signal at home risk having their payments denied if they cannot check their expenses online.
A new warning from e-commerce company Adyen today predicted that only 44% of businesses are prepared for the new SCA rules.
Colin Neil, Managing Director of Adyen UK, said: “This creates a major hurdle for these companies. Not only do they risk clashing with regulators, but they can also see their customer experience suffer.
“One of the concerns brands had with this legislation was that the additional authentication process would hurt their conversion rates.
“While this concern was not unfounded originally, the technology has come a long way from the existing proposition. SCA can now be delivered without any additional friction to the customer experience.
“SCA may seem like a short-term inconvenience, but in the longer term, it will be an essential tool for businesses to manage risk and reduce fraudulent transactions.”
You may have already noticed the additional security checks, as some card issuers started implementing SCA checks from January 18 in preparation for the full rollout.
The rules, which were introduced by the Financial Conduct Authority (FCA), were due to come into force from September 2021 but were delayed due to the Covid pandemic.
Mastercard expects about 25% of online transactions to require some form of additional verification, compared to just 1% of online purchases that currently require a password or some form of identification.
Jana Mackintosh, managing director of payments at UK Finance, which represents the banking industry, said: “Fraud is a growing problem, with criminals stealing more than £750million in the first half of 2021 alone.
“That’s why it’s more important than ever that additional safeguards like SCA are put in place.
“For retailers, implementing SCA will provide customers with peace of mind that payment processes are more secure.”
It is important to remain vigilant when it comes to receiving phone calls from someone you believe to be your bank.
Always be wary of calls you weren’t expecting and remember that your bank will never ask you for your PIN or full password, even under the new SCA rules.