GOP fraud plan: More tools for banks, no scam liability

This legislative proposal could change how you manage customer expectations around payments and refunds. House Republicans are pushing a fraud prevention plan that prioritizes bank security over instant speed. For retailers, the biggest news is what the bill doesn't do: it refuses to force banks to pay for 'authorized' scams. This means if a customer is tricked into sending money via P2P apps or wire transfers, the bank isn't on the hook to refund them. That liability stays with the consumer, which often leads to customers demanding refunds directly from the merchant instead. The plan also suggests giving banks more power to delay suspicious transactions. This could mean longer 'funds availability' holds on large purchases. If your business relies on high-ticket sales through direct transfers or new financing disbursements, you might see an uptick in pending transactions while banks run extra checks. The goal is to stop money from leaving accounts before fraud is detected. While this helps prevent chargebacks later, it could introduce friction at the point of sale. Specifically, look out for longer hold times on 'next-day' funding if a lender flags a transaction as high-risk under these new guidelines.

Source: American Banker — Top News

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