At present account names are not checked when sending electronic payments. The new service, ‘confirmation of payee’ will aim to prevent fraudulent or misdirected payments by introducing a new aspect to payments under which the name on the account is checked when sending a payment.

From next year, banks and other financial providers will be able to roll out the service. Customers setting up a payment will be presented with three outcomes. If the correct account name is used, the system will confirm that the details match and the payment will be processed. If only minor details are identified, the actual name on the account will be shown, allowing the customer to update the details. If the customer enters the wrong name for the account holder, they will be told the details do not match and advised to contact the payee.


The specifications for confirmation of payee were tested via extensive stakeholder and consumer research. The proposal was generally well-received by businesses and customers, with those involved placing emphasis on the need for a system to instantly provide verification results and consistent functionality.


According to figures produced by UK Finance, 50,966 fraudulent payments were made in relation to Authorised Push Payment (APP) fraud in the first half of 2018, resulting in a total case value of £145.4m. £30.9m of this was returned to affected customers.


Confirmation of payee is one of a number of measures being introduced to combat fraud. Under a new ‘contingent reimbursement model’ being introduced in 2019, customers who can be shown to have exercised diligence in checking that names match will be afforded greater protection from loss.

Pay.UK, formerly the New Payment System Operator, maintains and develops the UK retail payment systems and standards that are core to the economy being able to function on a day-to-day basis. Paul Horlock, Chief Executive of Pay.UK, said: ‘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 will not 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 are paying, giving better protection against certain types of fraud, and helping to stop accidental mistakes too.’


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