PSR sets out plans for fraud prevention tool, Confirmation of Payee, to be available to more customers


Confirmation of Payee APP scams Consumer Protection

  • The regulator wants to see Confirmation of Payee available to more people 

  • The PSR also provides an update on APP scams 

Today, the Payment Systems Regulator sets out its latest plans to fight fraud and protect victims of APP scams by outlining its next steps for the wider implementation of fraud prevention tool, Confirmation of Payee (CoP) 

Every year thousands of individuals and businesses fall victim to Authorised Push Payment (APP) scams – where they are tricked into sending money to an account controlled by a fraudster. There are also a significant number of accidentally misdirected payments that are not recovered. The latest figures show that in the first half of 2021, £355 million was lost to APP scams, overtaking card fraud losses 

The PSR expects to see more action from financial institutions to stop these scams from happening and to better protect and reimburse people if they do fall victim.  

Confirmation of Payee 

Confirmation of Payee (CoP) is designed to reduce certain types of accidentally misdirected payments and APP fraud in bank transfers by checking the name on the recipient’s account matches the details a payer has given to their bank. The name check tells payers whether there is a match or not. This means people can more easily spot when something isn’t right.  

This has been a key way to stop certain types of APP frauds and accidentally misdirected payments from happening and is why the PSR directed the UK’s six largest banking groups to introduce CoP over FPS and CHAPS transactions, with several other institutions having signed up to offer the service since it was introduced in 2020. There are now more than one million CoP requests every day.  

Earlier this year, the PSR set out to understand the impact of the introduction of CoP Phase 1 by the directed banks and assess what the next steps should be to bring this service to more financial institutions and their customers.  

In today’s publication, the regulator:  

  • sets out the industry's commitment to deliver Phase 2 and stands ready to step in if there is a delay in delivering the capabilities; and  
  • confirms its plan to direct the necessary system developments to enable the transition of current CoP participants from Phase 1 to Phase 2. This is key as making sure that the current providers of CoP transition to Phase 2 is a significant driver to the success of wider implementation by more institutions from the end of 2021. 

Chris Hemsley, Managing Director of the PSR says: 

“Confirmation of Payee has proven to be an effective way to stop scams from happening, but it should be widely available – we want to see more banks, building societies and financial institutions use this service to protect their customers. The work that has been happening to broaden the CoP service will mean that many more fraudulent and mis-directed payments should be prevented.  

“There is currently good progress being made in making the service more widely available, but we will step in if we need to, including if we think that progress is stalling.” 

An update on the PSR’s work to fight APP scams 

The PSR has also been working to fight APP scams and sought views on measures earlier this year.  

Those measures included the publication of APP scams data (including reimbursement rates) by specific banks and building societies, improved data sharing between payment providers so that scams can be detected and prevented and setting out options for reimbursement for the victims of APP scams.  

The regulator has been considering the actions it thinks needs to happen and will be consulting on those steps in due course. 

The combination of actions taken by the regulator will make a significan