Measures designed to protect online shoppers from fraud have been delayed for 18 months to avoid potential disruption to consumers.
The City watchdog, the Financial Conduct Authority (FCA), yesterday announced the delay to the system, which would have required shoppers to respond to a text or email to confirm online purchases of more than £28, in order to avoid “material disruption".
The Telegraph had warned that the introduction of the protections, due to come into force on September 14 in line with EU regulations, could cause chaos for online shoppers and also leave some customers cut off from online banking.
However, experts have now expressed disappointment that consumers will be at greater risk of card fraud for more than a year.
Announcing the delay, Jonathan Davidson, a director at the FCA, said: “The FCA has been working with the industry to put in place stronger means of ensuring that anyone seeking to make payments is not a fraudster.
“While these measures will reduce fraud, we want to make sure that they won’t cause material disruption to consumers themselves; so we have agreed a phased plan for their timely introduction.”
Sarah Megginson, of ClearScore, the credit reference agency, said the delay would be frustrating for customers.
She said: “With fraudsters becoming more and more sophisticated, this delay in adding an extra layer of security means consumers will continue to be at risk when shopping online for many months to come.
“The major problem is that so much fraud goes unnoticed, often leaving innocent people hundreds – sometimes thousands – of pounds out of pocket.”
Eric Leenders, a director at banking trade body UK Finance, said it was important that the additional security measures are balanced with consumer convenience, and that the FCA’s plan is the best option.
He added: “Fighting fraud must be a priority for everyone and these new rules will be an important tool in protecting customers, helping keep them safe when they shop online.”
Around £671m was estimated to have been lost to card fraud in 2018, although regulations mean victims will be refunded in most circumstances.