The UK government has committed to introducing new legislation to protect access to cash, to better enforce against economic crime and to require banks to refund victims of authorised push payment (APP) fraud.
The new Financial Services and Markets Bill, which was announced in the Queen’s Speech at the state opening of parliament, will support consumers by protecting access to cash, while also tackling the issue of APP fraud.
The continued availability of withdrawal and deposit facilities across the UK will be ensured by the bill, the government said, noting that it will also guarantee that the country's cash infrastructure is sustainable for the long term.
The bill will also enable the Payment Systems Regulator to require banks to reimburse APP scam losses, which total hundreds of millions in the UK.
“We know that access to cash is still vital for many people, especially those in vulnerable groups,” said John Glen, economic secretary to the Treasury, in a statement. “We promised we would protect it, and through this bill, we are delivering on that promise.”
Glen continued: “We are also sticking up for victims of financial scams that can have a devastating impact, by ensuring the regulator can act to make banks reimburse people who have lost money through no fault of their own.”
The new Access to Cash commitments were welcomed by consumer group Which?.
“'While the pandemic has accelerated the move to digital payments for many consumers, many are not yet ready to make that switch and require protection from an avalanche of ATM and bank branch closures that have left the UK's cash system at risk of collapse.”
Which? said that the legislation must ensure that clear requirements are placed on the industry to meet communities' need for cash and that the Financial Conduct Authority is given powers to monitor and enforce these as soon as possible.
Financial crime was also a centrepiece of the Queen's Speech, with the government committing to introduce a new Economic Crime and Corporate Transparency Bill that aims to clamp down on money laundering and create powers to more quickly and easily to seize and recover crypto-assets, which may be used in ransomware payments.
The authorities are slowly waking to the fact that the crypto markets are here to stay, with regulatory changes being brought into force to bring the market into mainstream focus, said Neil Williams, deputy head of complex crime at Reeds Solicitors. “Those who invest in crypto-assets legitimately will be pleased to hear that powers to seize assets are to be enhanced, as many who find themselves victims of scams or frauds are frustrated by the time it takes to recover property which can disappear in the blink of an eye.”
Following on from measures introduced last month, the new legislation will continue to “drive out dirty money”, according to the government, by ensuring that London’s financial services industry cannot be taken advantage of by criminals and oligarchs.
The government also intends to enable businesses in the financial services sector to share information more effectively to prevent and detect economic crime.
Companies House, meanwhile, will be given more effective investigation and enforcement powers via the legislation.
For example, the accuracy of data held by Companies House will be strengthened by the introduction of identity verification for people who manage, own and control companies and the other UK registered entities. It will also enable better cross-checking of Companies House data with other public and private sector bodies.
“For too long, the ease by which information can be shielded from authorities has been facilitated by the passive function of Companies House, yet it would seem no more,” said Williams. “Armed with a new Register of Overseas Entities, enhanced data sharing, and now, crucially, the ability to enforce compliance should see a more robust regulatory office emerge.”
Effectiveness will require investment, however, he added. “Funding will be a key issue to achieve the stated aims, otherwise the new data storing fortress will quickly crumble.”