Changing the name of the game: Confirmation of Payee

Confirmation of Payee is a new feature that has been implemented by the six largest retail financial institutions and is an important tool in the effort to prevent fraud. Two further firms have also completed their implementation with several more in development.

The introduction of Confirmation of Payee (CoP) gives customers more confidence that their payments made through Faster Payments and CHAPS are correctly addressed and will help people avoid paying the wrong person by accident. When setting up a new payee, a CoP check verifies that the account name is correct and provides one of four responses below.

We can all start playing our part by using the correct account name. This will help make sure that the UK's payments continue to be made safely, securely, and reliably.

The concept is simple: to allow someone, when they make a payment, to check whether the account identified by the fourteen digits (or more) of their sort code and account number is actually owned by the person (the payee) they want to pay. Now, with the technological infrastructure enabled by the Open Banking directory, financial institutions have been able to leverage an API standard to enable sensitive customer data to be shared safely and securely. This is all in the aid of giving customers confidence that  they are paying the correct person or business as intended.

This change will have real impact how payments are made. Customers of firms that have implemented Confirmation of Payee will need to know the name of the person they want to pay, similar to asking someone who to make a cheque payable to. For individuals, this will be their first name and last name - for businesses, their correct account name - which may not be the same as their trading name. Casual terms of reference, such ?Mum? or perhaps ?Dave from the pub? will not work, neither will someone's initials as shown on their bank card, as the receiving firm may be unable to match the name with limited information. Instead customers are advised to use the individual's first and last names.

There are four types of responses that customers will start to see:

1.    Match - all is well, the payee name is the same as that given.

2.    Close match - the name on the account is similar to the one given, you may be advised to contact the intended payee.

3.    No match - the name on the account cannot be matched with the name given, you may be advised to contact the intended payee.

4.    Confirmation of Payee unavailable - the account identified cannot be accessed by a Confirmation of Payee check.

You should never proceed with a payment that you are unsure about. Always take the advice of the Take Five to Stop Fraud campaign and remain vigilant against fraud, particularly if you feel under pressure or are uncomfortable with the payment. If Confirmation of Payee is unavailable, then you may want to make check the account details again.

Area of expertise: