Currently, when you transfer money from one bank account to another there is no name check on the account. Provided the account and sort code etc, your money will leave your account and it could to be a ‘crook’ who gives you a legitimate name of an account e.g. Your electricity company, the Bank, HMRC etc yet offers false account details so that money is transferred to a fraudsters account.
This week Pay.uk announced plans to combat bank account fraud even further by having all banks include a ‘name check’ on an account. We are all used to PIN checks, sort codes, account numbers, passwords and special words, characters, family members or favourite pet’s names etc but this new system will also verify the account name that you are sending money to.
Pay.UK is the UK’s leading retail payments authority. Its aim is to enable a vibrant economy by delivering best in class money payment infrastructure and standards across the banking and finance industry for the benefit of consumers and businesses everywhere.
How Confirmation of Payee Name will work
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:
The bank that you sending the money to will do the name check but ultimately the decision on whether to proceed with a payment will always rest with you, the sending customer – with the risks made clear if you proceed with the money transfer even after received a non-match name.
This Confirmation of Payee name safeguard is part 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. Under a new ‘Contingent Reimbursement Model’1 industry code also being introduced in 2019, it is anticipated that any customer who has taken due care and received a positive name match through Confirmation of Payee will get greater protection from financial loss.
When is it starting?
Pay.UK are talking to banks now with a view to establishing a scheme by early 2019. They will have to move fast but guess most of the infrastructure of ‘electronic messaging’ is already in place given that our PINs, account details and 3 number security details are checked regularly.