PAY UK moves towards providing greater protection for the payee

18 October 2018

Currently, when an electronic payment is made, the account name is not checked and as a result fraudsters have become increasingly sophisticated in using this to trick people into sending money to the wrong account.

It is the aim of Confirmation of Payee to help prevent many fraudulent payments from being made in the first place, by introducing another hurdle for fraudsters which will provide effective warnings to customers about the risks of sending to an account where the name did not match.

When setting up a new payment, or amending an existing one, banks will be able to check the name on the account of the person or organisation you are paying. There are three possible outcomes:

  1. Yes - where the correct account name has been used the payer will receive confirmation that the details match and can proceed with the payment
  2. No, please check – where the name entered is a similar name to the account holder, the payer will be provided with the actual name of the account holder to check. The payer will be able to update the details and try again or contact the intended recipient to check the details
  3. No, the name is wrong – where the wrong name is entered for the account holder the payer will be told the details do not match and advised to contact the person or organisation they are trying to pay.

The matching decision is made by the intended recipient’s bank, as they have the best knowledge about the name of the person or business that is being checked. No matter what the outcome of the name check, the decision on whether to proceed with a payment will always rest with the sending customer – with the risks made clear if they choose to go ahead after receiving a non-match.

This is one of a package of measures being introduced across the industry, which also includes more help for customers if they fall victim to Authorised Push Payment (APP) fraud.

Sending a payment with an incorrect sort code or account number is like addressing a letter with the wrong post code. Even if you have used the correct name it won’t reach the intended destination – and fraudsters have become increasingly sophisticated in using this to trick people into sending money to the wrong account.

“Confirmation of Payee will let you check you have the correct name for the person or business you’re paying, giving better protection against certain types of fraud, and helping to stop accidental mistakes too.

Said Paul Horlock, Chief Executive of Pay.UK

Further engagement regarding the guidelines will be undertaken with potential participants during the rest of 2018 to support their implementation plans. The Payment Systems Regulator recently announced it will consult on requiring Payment Service Providers (PSPs) to implement Confirmation of Payee in the first half of 2019.

The leading retail payments authority in the UK – formerly known as the New Payment System Operator / NPSO has launched their new name and brand: Pay.UK. Pay UK formerly NPSO (New Payments Systems Operator ich recently consolidated three UK retail payment schemes Bacs, Faster Payments and the Cheque and Credit Clearing Company)

Further information about the work carried out up until this point can be found in the NPSO Autumn newsletter