Confirmation of Payee: more firms adopt security checks to reduce fraud
Virgin Money and Cambridge Building Society have become the latest providers to implement Confirmation of Payee (CoP), an important anti-fraud measure.
This name-checking service helps banks and building societies protect customers against authorised push payment (APP) fraud, where victims are tricked into sending money to criminals, as well as accidentally misdirected payments.
However, millions of customers are missing out on these security checks because hundreds of payment firms are yet to implement this vital layer of security, including Bank of Ireland UK, Metro Bank and PayPal.
Which banks and building societies offer Confirmation of Payee?
After many delays, the six biggest UK banking groups – Barclays, Lloyds Banking Group, NatWest Group (including RBS), Santander, HSBC (including First Direct) and Nationwide Building Society – were forced to implement CoP by the end of June 2020.
Monzo and Starling were the first banks to sign up for CoP voluntarily, while the likes of Revolut, The Co-operative Bank, Triodos and TSB followed suit later.
Virgin Money and Cambridge Building Society have become the latest firms to adopt CoP. The Cambridge is the first of the smaller building societies to join the service, although this only applies to incoming payments.
Most building societies were initially unable to implement CoP due to technical restraints but the system designed for banks has since been adapted to support accounts that rely on additional data, such as a building society account number, to make payments.
Nick Warner, programme manager at The Cambridge, told Which?: 'For outbound we have nominated accounts for making Faster Payments and don’t offer payments to third parties. Nominated (current) accounts are verified before being activated – just not using CoP. There is a much greater need on inbound payments, whether it’s moving a large amount into a bond, making a payment to your mortgage or topping up savings, there is real value there so it’s where we chose to invest.'
Customers missing out on protection
Many big names have yet to sign up including current account providers AIB Group (UK), Bank of Ireland (UK), Citibank and Metro Bank.
The Payment Systems Regulator (PSR) has included these banks in a list of 50 firms it wants to adopt CoP by 30 June 2023. This list also includes PayPal, Sainsbury’s Bank, Skipton Building Society, Tesco Personal Finance and Yorkshire Building Society.
In the meantime, if you make a payment to a firm that doesn't make CoP checks, be extra careful to avoid mistakes and consider the possibility that a fraudster could be trying to trick you into sending them money.
How does Confirmation of Payee work?
Without CoP, providers take no notice of the name entered and process payments using the account details you enter and nothing else. This makes it too easy to accidentally enter the wrong digits and can be abused by criminals who trick fraud victims into transferring money to accounts in their control.
With CoP in place, your bank warns you if the name entered doesn’t match, or only partially matches, the account details. To make a payment you will be asked to enter: the full first and last name or business name; the sort code and account number; and the account type ie, if it’s ‘personal’ or ‘business'.
There are four possible CoP messages, although not all banks use identical wording:
- Match - the name on the account matches. Proceed with the payment if you’re happy to do so
- Close match - the name on the account is not an exact match. It could be an abbreviated name or perhaps a spelling mistake. If you recognise the closely matched name, you can choose to continue or double check the payee details before continuing with the payment
- No match - the payee’s name details don’t match the name on the account. Cancel the payment until you’ve made further checks, including for possible fraud
- Unavailable – it has not been possible to check the name. This could be because the receiving bank doesn’t offer CoP. Double check the payee’s details and consider whether someone is trying to scam you
CoP checks payments using the Faster Payments System (including standing orders) and CHAPs (high-value payments), whether they are made online, via your mobile banking app or in a branch. It doesn’t apply to payments that are not in pounds sterling or BACS payments (including direct debits).
- Find out more: how safe is online banking?
