Banks Introduce Confirmation of Payee to Tackle Fraud
The Confirmation of Payee (CoP) system was launched in October 2018 but implementation was delayed multiple times. Now under Payment Systems Regulator rules the six key banking groups—Barclays, RBS, Lloyds, HSBC, Nationwide, and Santander and their subsidiary banks—have a deadline of 30th June to execute the system for Faster Payments and Chaps.
— Neira Jones (@neirajones) June 4, 2020
Some banks have already introduced it, so if both your bank and your intended recipient are now taking part, you might be inclined to check who is taking your money. If you can identify a mismatch, the payment can be stopped.
In the past, bank transfers would be complete in spite of the name written and the fact that it matched the account and sort code. This allowed scammers to pose as someone else—often authentic people and companies—and fool people into sending money to the wrong account. Customers could also transfer funds to the wrong account by mistyping the account number by mistake.
Bank of Scotland, Halifax, Lloyds, NatWest, RBS, and Ulster Bank are some of the banks that have already introduced the system to facilitate Faster Payments for both individuals and companies. Faster Payments are the most common type of bank transfer, taking under two hours and for sums up to £10,000. By the end of June, banks from the six main groups will also introduce confirmation for Chaps payments, used for huge sums of money.
After 30 June, banks will be launching the system for Bacs payments, which are mostly adopted for direct payments or by companies to pay salaries. However, the system most likely won’t apply to international payments any time soon.
The Confirmation of Payee system is directed to impede one type of bank transfer scams, namely authorized push payment fraud. According to UK Finance, Britishers lost a staggering amount of £465 million to these scams in 2019. Thit includes unknowingly transferring funds into accounts exploited by criminals or paying for goods and services that were never received.
Last month the Lending Standards Board (LSB) warned that banks aren’t doing enough to protect and compensate victims of this type of fraud, especially their vulnerable customers.