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PSR finalises plans for the wider implementation of fraud prevention tool, Confirmation of Payee

10/02/2022

Confirmation of Payee APP scams Consumer Protection

Today, the Payment Systems Regulator (PSR) confirmed and published a new rule that paves the way for more banks and building societies to adopt Confirmation of Payee (CoP), the bank account name checking service.  

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. 

In 2019, the PSR directed the UK’s six biggest banking groups to implement the first stage of CoP – a fraud prevention tool that checks the names, account numbers and sort codes when payments are made from one account to another.  

Confirmation of Payee 

CoP was designed to help stop fraud and accidentally misdirected payments by checking whether the name of a payee’s account matches the name and account details provided by a payer. 

The PSR’s analysis of Phase 1 of CoP has shown that it has: 

  • slowed the increase in authorised push payment (APP) scams 
  • reduced the levels of fraudulent funds received by PSPs that have implemented CoP  
  • reduced the number of accidentally misdirected payments. 

In summary, the analysis carried out by the regulator shows that a wider adoption of CoP by banks and building societies is necessary.  

At the end of 2021, the regulator set out its proposed plans for the service to be rolled out to institutions that rely on different reference information, which would see more financial institutions able to offer CoP to their customers when making payments. This would require ending the dual running of two technical environments to ensure that transactions between existing CoP participants and new joiners are interoperable. 

Today’s decision will make sure that the technical and system requirements for Phase 2 will be implemented by 31st May 2022.  

Commenting on the rule, Genevieve Marjoribanks, Head of Policy at the PSR says: 

“Confirmation of Payee is a key part of our fight against APP scams, and this new rule is an important step in taking protections to the next level. Today, we have made it clear to the industry the work that needs to be completed by the end of May to ensure that the right systems are in place to offer this vital protection to more people.  

“Used more widely, this service will make sure that everyone who makes payments will benefit from the same levels of protection as that currently offered by the directed banks and those that voluntarily implemented the checking system.”