Confirmation of Payee rules kick in
The UK’s largest banking groups have introduced new security checks for all customers who transfer money to friends, family, businesses and other recipients.
‘Confirmation of Payee’ safety measures mean customers can double-check who they are transferring money to.
The new rules, which come into force today, give bank customers transferring cash to another account the additional protection of checking the name of the person or business you want to pay against the account number you are paying.
If you attempt to make an online payment and the account name you give doesn’t match the name matching the sort code and account number at the bank, you’ll be alerted to this and asked if you want to continue the transaction.
Previously there was no obligation for banks to check the names matched.
This loophole meant fraudsters were able pose as other people to trick customers into sending money to other accounts in so-called Authorised Push Payment (APP) scams.
As well as reducing fraud, the rules will help reduce accidentally misdirected payments.
Confirmation of Payee has now been adopted by all brands of the UK’s largest banking groups: Bank of Scotland, Barclays, HSBC, Lloyds, Natwest, Nationwide, RBS, Santander and Ulster Bank.
The rules are overseen by the Payment Systems Regulator (PSR). Initially the UK’s biggest banking groups were due to introduce Confirmation of Payee by the end of March 2020 but this was pushed back to the end of June due to coronavirus.
Chris Hemsley, PSR managing director, says: “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 Confirmation of Payee, with Monzo and Starling having started to introduce the full service to their customers.
Gareth Shaw, head of money at Which?, says: “The widespread introduction of this vital name-check security measure is long overdue and should help stop many people from losing life-changing sums of money to scams.
“Its impact must be closely monitored to ensure it has the desired outcomes, and the industry should remain alert to fraudsters seeking to exploit any loopholes.
“While it’s great to see more firms provide these checks for their customers voluntarily, the regulator should now set out plans to make it mandatory across all payment providers, so all consumers can benefit from the same level of protection.”