Fraud is the most common offence in the country, accounting for a third of all crime in England and Wales.
Criminals have stolen billions of pounds through romance scams or by impersonating a genuine trader to trick victims into transferring money.
“We need to protect these people better, which is why we are giving banks more time to investigate suspicious payments and break the criminal spell that scammers weave,” said Tulip Siddiq, the economic secretary to the Treasury.
Banks have lobbied for permission to take longer to agree to payments, to allow them to investigate suspicious transfers.
The new law will give them time to look at unusual spending patterns, contact a customer, and investigate further before the money is transferred.
The previous government’s draft legislation had proposed giving banks the new powers by 7 October, but now they will take effect from the end of the month.
