Confirmation of Payee rules introduced
Aug 11, 2020
In a bid to protect against payment scams and payments made in error, banks across the UK have adopted a name checking service called Confirmation of Payee.
The new security rules came into force last month, and mean that bank customers can double check who they are transferring money to. If you are making a one-off payment, or amending an existing payment, the service lets you check that you’re paying the right person or business. You must have the account type (business or personal) and account name correct – if they don’t match, you should check with the person you’re paying before going ahead. You can decide to make the payment without checking, but if there’s no exact match you need to accept that your money could go to the wrong account and you may not get it back.
Exactly the same process applies to payments you receive. If your name doesn’t match your account, the person or business sending you a payment should check with you that your details are correct. However they can decide to go ahead without checking first – so you might receive the payment anyway.
Authorised Push Payments
Until the Confirmation of Payee rules kicked in, banks were not required to check the details of any payment requests. This meant that fraudsters were able to trick people into sending money to someone it wasn’t intended for, through what’s known as an Authorised Push Payment (APP) scam. An APP is a payment made from one account to another without using a debit or credit card. APP scams can take place not just online, but also over the phone and in person.
Confirmation of Payee was due to be introduced at the end of March 2020, but it was delayed until July due to coronavirus. It has now been adopted by the UK’s largest banking groups, including Bank of Scotland, Barclays, HSBC, Lloyds, Natwest, Nationwide, RBS, Santander and Ulster Bank. At this stage it is still voluntary for banks to provide these payment checks, but the Payment Systems Regulator (PSR) is under pressure to make it mandatory across all payment providers.
If you have any queries about Confirmation of Payee and making the correct payments from your account, give us a call and we’ll be happy to help.