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A new ruling, Confirmation of Payee, was quietly introduced on 1st July 2020 – a year after the original deadline. But what is it, and how does it affect your online banking processes? This short article will explain everything you need to know.
It’s been a long time coming, but Confirmation of Payee is finally here. In a nutshell, it helps prevent fraudulent bank transfers – especially through online banking.
Previously, your money transfers only required a sort code and account number for the transaction to go ahead. This often means you could accidentally send money to the wrong person – or worse, send it to a fraudster posing as someone else.
Confirmation of Payee is exactly what it sounds like: you’ll need to make sure the name of your recipient also matches from 1st July 2020. You’ll also need to confirm the type of account you’re sending it to – a personal or business account.
These extra details help banks put in place essential checks to make sure your money goes to the right person. It’s also the next step in fraud prevention, as no longer can someone give you account details using a fake name.
At the moment, only the Big Six banking groups (Lloyds, HSBC, Nationwide, Santander, Barclays, and Royal Bank of Scotland have signed up to the scheme. More banks are expected to follow, but it’s not a compulsory requirement.
Others have voluntarily joined already, including Monzo, Starling Bank, TSB, Danske Bank, and the Co-Operative Bank. It’s in the banks’ favour to join, as fraud investigations cost them so much money each year. Putting in this extra fraud prevention step will help reduce how much banks have to spend on investigations and lost money.
When you’re transferring money using online banking, you’ll now have an extra step or two to go through. As well as entering the account and sort code numbers, you’ll need to include the full name on the account.
This’ll show you four outcomes once you try to submit the payment: exact match, partial match, no match, or no name check.
So, unless there’s an exact match, you’ll have the chance to review what you’ve entered before submitting the payment. At the moment, it only applies to direct ‘faster payment’ transfers – so direct debits and BACS transfers aren’t included.
Confirmation of Payee is just one more step in the fight against fraudsters. However, it doesn’t provide guaranteed protection from scammers – and there are lots of other ways they can get your money, too. Arm yourself against fraudsters, hackers, and scammers by reading these articles next.