Regulator sets date for payee name-checking system
The Payment Systems Regulator has set a new date for implementation of Confirmation of Payee schemes, after the initial date of July 2019 was scrapped.
Once the scheme is in place, anyone setting up a bank payment will be alerted if the name on the recipient account does not match, is incorrect or misspelt, meaning it can be corrected before a payment is made.
Confirmation of Payee will help fight so-called authorised push payment (APP) scams, where people are tricked by a fraudster into sending money to the wrong account, as well as stopping people from sending money to the wrong account or organisation.
The Payment Systems Regulator said Lloyds, Barclays, HSBC, Royal Bank of Scotland, Santander and Nationwide Building Society, which together account for about 90 per cent of bank transfers, must all be running Confirmation of Payee schemes by 31 March 2020.
The regulator also ruled that from 31 December 2019, the banks in question must respond to Confirmation of Payee requests. For example, a receiving bank must be able to notify the sending bank if names do not match.
From 31 March 2020 directed banks must send Confirmation of Payee requests and notify the payer of the outcome. For example, if there was a name match or a mis-match, banks should notify the person making the payment.
Earlier this year, the regulator pushed forward the development of a new voluntary industry code that sets out how victims of APP scams can be reimbursed.
Louise Buckley, co-managing director of the Payment Systems Regulator, said: “Today marks another significant step to making sure there are greater protections against APP scams. We have been committed to getting the right result for everyone – from driving forward the successful introduction of the voluntary industry code which came into force in May, to the implementation of Confirmation of Payee.
“UK banks have a clear deadline by which they need to have the systems in place to make sure that people are better protected from this devastating crime, and that it stops those payments from being made in the first place. We will be monitoring this closely to make sure it is implemented effectively.”