Today, the Payment Systems Regulator has published its consultation for Confirmation of Payee (CoP). This is seen as an effective way to protect people from Authorised Push Payment (APP) scams and the regulator wants to make sure its approach is the right one. 

The PSR has always been clear that more needs to be done to protect people from APP scams and CoP is one important tool for preventing these scams. Together with the new, voluntary industry code, designed by the industry and consumer groups, CoP will see consumers better protected from APP scams and have a greater chance of being reimbursed if they do fall victim. 

“APP scams have a devastating effect on the people who fall victim. We have always said that more could be done to protect consumers from this type of fraud – especially around preventing them from happening in the first instance. 

“Confirmation of Payee will not only provide people with protection against these scams, but also make sure that other, misdirected payments are prevented in the future as well. 

“We’re keen to hear from everyone about our proposals – we want to make sure we take the right action to give everyone the benefits from the protection it provides.”

Each year thousands of consumers and businesses fall victim to APP scams when they make a payment to an account that isn’t what they thought it was. Of the £145.4 million lost through APP Scams in the first six months of 2018, £93.9 million was attributed to malicious redirection. 

What is Confirmation of Payee?

CoP is the industry-agreed way of ensuring that names of recipients are checked before payments are sent. It will work by checking the account name and account details to make sure there is a match. Alerts will notify the payer whether there has been a match or not, meaning corrections can be made before the payment is made.

What happens next?

The technical standards have now been agreed in work coordinated by Pay.UK – the operator of the Bacs, Faster Payments and cheque payment systems in the UK and is now ready for implementation by banks and other payment service providers (PSPs). 

The PSR’s consultation considers whether regulatory intervention is needed to require banks and PSPs to implement CoP. The regulator believes that, for CoP to be effective in protecting both consumers and the banks, it needs to be implemented quickly and be widely available and this consultation seeks views on the most effective way to achieve this. 

The consultation considers timescales for introducing CoP, specifically that:

  • PSPs must be capable of receiving and responding to CoP requests from other PSPs by 1 April 2019
  • PSPs must send CoP requests and present responses to their customers by 1 July 2019

The consultation is open to receive feedback until 4 January 2019 and when the PSR will then consider the feedback received and the next steps.