UK online shoppers face more identity checks as new anti-fraud rules come into force | consumer affairs

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Online shoppers in the UK can expect more identity checks – and likely more card declined messages – over the coming weeks as retailers prepare for new anti-fraud rules coming into force March 14.

Shoppers have already started to see more requests to verify their identity as payment providers and retailers adopt new Strong Customer Authentication (SCA) rules.

Under the changes, before a retailer can accept an electronic (online) payment, they will need to verify that the customer is who they say they are. The measures are similar to those already faced by people logging into online banking.

While most low-value retail purchases will continue as before, with background checks, shoppers purchasing higher-priced items online will be required to enter a password, PIN, or credential. single-use access sent to them by SMS. or landline, or log into their banking app and approve the purchase.

The rules, which were introduced by the Financial Conduct Authority (FCA), were due to come into effect a year ago but have been delayed to give retailers more time to adapt. The legislation originated from the European Banking Authority and was passed into UK law before Brexit.

It will apply to debit and credit card purchases and will have the greatest impact on those making the purchases considered to be the riskiest. The new rules don’t apply if you buy something over the phone.

High value purchases, or those that fall outside of a buyer’s normal spending habits or were made on a previously unused device, are likely to trigger an additional security check.

Mastercard says it expects around 25% of online transactions will require some form of additional customer verification after March 14. Until now, only 1% of online purchases triggered the need to enter a password, or similar.

Under EU rules, payments below €30 (£25) are considered low value, but there are exemptions which mean all spending above this level will not trigger an SCA.

Similarly, multiple low-value payments could result in a verification request.

If you’ve noticed this before, it’s because card issuers started refusing some non-compliant transactions on January 18 as part of the “scaling up” of full SCA implementation.

There have already been anecdotal reports of refused payments. Ahead of Christmas, the FCA warned in an update that merchants who are unable to fully comply with anti-fraud requirements “risk having their customers’ online transactions refused”.

Jana Mackintosh, managing director of payments at UK Finance, which represents the banking industry, said: “Fraud is a growing problem, with criminals stealing over £750m in the first half of 2021 alone. it’s more important than ever that additional safeguards like SCA are in place. For retailers, implementing SCA will provide customers with peace of mind that payment processes are more secure. »

In 2019, the consumer group Which? warned that those without a cell phone or signal at home risked being disenfranchised by the changes.

The FCA seems to have taken this into account and told payment companies that it expects them to develop SCA solutions that work for all consumer groups.

“This means you may need to provide several different authentication methods to your customers. This includes methods that do not rely on mobile phones, to meet the needs of consumers who do not have or do not want to use a mobile phone,” he says.

The relatively small group of people who buy online but do not use mobile phones will have to choose to verify their identity in another way. Those with a smartphone but not receiving a signal at home are encouraged to download their bank’s app, which will work over wifi.

The national construction company is typical in that it has told customers who don’t use its banking app that they can choose to receive a code via message on a landline, or by using their card reader. and their debit card.

He advised customers to make sure they have the correct mobile phone number, email address and landline, “so that you quickly receive any passcodes we send and you are not interrupted while shopping online”.

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