CoP means the members of these six banking groups can check the name on a payee’s account against the sort code and account number. Customers setting up a new payee will now be able to confirm that the name they’ve entered matches the one on the account they’re intending to pay. This helps to prevent payments going to the wrong account, whether accidentally or due to fraudsters.
In August 2019, the PSR used its regulatory powers (in the form of Specific Direction 10) to require members of the UK’s six largest banking groups to implement CoP by the end of March 2020. Recognising the pressure on businesses due to COVID-19, the regulator announced it would not take formal action until 30 June as long as consumers were not disadvantaged over the additional three months.
By giving the six directed banking groups that additional time, they have been able to implement the new service successfully giving greater protections to consumers.
Chris Hemsley, Managing Director of the PSR said “The widespread implementation of this additional name-checking provides a new, added layer of protection for consumers. As well as helping stop fraudsters from committing devastating crimes, it will also help people avoid paying the wrong person accidentally.”
“We’re pleased to have reached this significant point, and I welcome the work that the directed Banks and Building Societies have put in to reach this point. Their customers can now make payments with greater assurance that their money is going to the person they intended.”
The PSR has also seen the first non-directed banks introduce CoP, with Monzo and Starling having started to introduce the full service to their customers. The regulator is now turning its attention to the impact of CoP on fraud prevention before assessing what further action may be required.”
Commenting on the Payment System Regulator’s (PSR) announcement Eric Leenders, UK Finance Managing Director of Personal Finance, said “Confirmation of Payee is an important tool in the effort to prevent fraud and will help people avoid paying the wrong person by accident, and banks and building societies have worked hard to ensure its safe and effective implementation. Customers will need to have the first name and last name of the person they are paying – instead of their initials or nickname. For payments to businesses, customers should ask for the correct account name as this may not match the business’ trading name.”
“Customers should always stop and make further checks if they get a ‘no match’ and confirm the account details of the person they want to pay, particularly if they have been asked to pay an amended or new account. Customers should always take the advice of the Take Five to Stop Fraud campaign and remain vigilant against scams. The industry continues to fight fraud on every front, investing millions in advanced security systems to protect customers and supporting law enforcement in combating the organised criminal groups responsible for fraud.”