Confirmation of Payee (CoP) is a service that checks account names match up to their correspondent account numbers and sort codes, giving businesses and consumers greater assurance that … These also include investing millions in sophisticated security technology, the Authorised Push Payment Scams Voluntary Code and the Take Five To Stop Fraud campaign in partnership with government. Resolving fraud can be expensive and time-consuming, involving many entities. It is possible that you are being targeted by criminals and the payment is being requested for fraudulent purposes. Confirmation of Payee is being developed by account providers in line with their company policies on providing for these vulnerable customers and those with additional access needs. For example, if you have your initials on your bank card, you will still need to give your full first name and last name to the person paying you. UK fintech Modulr has today launched Confirmation of Payee (CoP), a fraud prevention initiative spearheaded by retail payments authority Pay.UK. When these payments are processed, only the account number and sort code are matched when processing any kind of payment – there’s no safeguard to ensure that account names match up with account numbers. Confirmation of Payee can dramatically reduce the risk of direct financial losses incurred by fraud. Your name will be used in communications that your account provider has with you (such as a bank statement) and through your online or mobile banking applications. It represents a significant step forward towards a safer payments ecosystem. You can use the search function to find a range of UK Finance material, from consultation responses to thought leadership to blogs, or to find content on a range of topics from Brexit to commercial finance. On average, businesses that were hit by fraud in 2019 lost £18,000 each – money that is often difficult to get back. It is likely that the account name is the legal or trading name provided at the time of account opening or subsequently notified to the account provider after a change of name. In 2019, consumers lost approximately £317m to APP fraud, up 39% from the previous year. [ii] While some victims are able to bounce back from the consequences of fraud, for others the financial impact can be long-term or even life-changing. No, the Payment Systems Regulator has mandated participating banks to implement Confirmation of Payee for the setting up of new payments and the amending of details for existing payments through Faster Payments or CHAPS. With the help of over 200 stakeholders representing payment service providers, customer groups and regulators, Pay.UK developed the detailed design of the proposition, along with the rules and standards for the service. • Establish documented internal processes for requesting and authorising all payments and be suspicious of any request to make a payment outside of the company’s standard process or for unusual amounts. Banks and other payment providers will use secure technology to safely exchange Confirmation of Payee requests. The message commonly requests a change to payment details or for a payment to be made urgently to a new account. Confirmation of Payee will help prevent misdirected payments including several types of Authorised Push Payment (APP) fraud – where a victim is tricked into sending a payment to a fraudster. Confirmation of Payee has long been seen as a key tool when it comes to preventing APP fraud, which took £456million from victims in 2019. And if a consumer or business is tricked into making a payment to the wrong account, there’s no guarantee of reimbursement. Often the criminals will try to acquire details from businesses, such as the date when regular payments are due, to make their approach more convincing. Confirmation of Payee unavailable: Where an account is not available through the CoP system, whether temporarily or otherwise, you will receive notification that the account is unable to be checked. It said in a statement: 'While not currently mandatory under the code, Confirmation of Payee is a major technical change to digital payments and another important tool in the fight against fraud. when a person is tricked into authorising a payment to a criminal’s account, through social engineering or other means of manipulation. The business will not be able to see the actual name on the non-matched bank account. For businesses, the benefits include:  ✔️ Reduced risk of fraud ✔️ Less financial losses ✔️ Less time investigating fraud✔️ Better customer experience. Alternatively, they will be able to update the details and try again or contact the intended recipient to confirm the details. Some providers may choose to phase in the system earlier than this. Registered address: 1 Angel Court, London, EC2R 7HJ © UK Finance Limited (trading as UK Finance) 2021. If a customer transfers an incorrect amount, they should contact their provider immediately who will be able to advise on next steps. And the impact of fraud on businesses can go beyond financial losses – damaging relationships between companies, suppliers and partners and eroding customer confidence. Customers and businesses should not proceed with a payment if any of the details do not match. Modulr is the first non-bank to do so. Most providers have a confirmation step within the payment journey where the customer can check the amount before approving it and we strongly advise that customers follow this process. Customers should contact their account provider if they are concerned they may be, or have been, a victim of fraud. The regulator provided the following instruction: If a business thinks they need to change the name their account provider has for their account, they should advise their account provider of the details to ensure they show on the business’ account before any new payments are made to the new name. Put payments at the heart of your platform, workflows and customer experiences within your software. Create a free sandbox account and access to our API and customer portal. [iii] UK Finance, Fraud – The Facts 2020: The definitive overview of payment industry fraud, 2020. Often when you send a payment to a fraudster, it means a legitimate recipient (customer or supplier) is left waiting to receive their funds. Challenge: Could it be fake? Times of crisis like COVID-19 provide even more opportunities for fraudsters, with the sudden and widespread transition to home working. Businesses are then tricked into sending money to an account controlled by the fraudster rather than the genuine supplier. There are four possible outcomes to the Confirmation of Payee check when a customer is making a payment: If a business used the account name, (which if they are paying a personal customer is likely to be the full first name and last name) they would receive confirmation from their financial provider that the details match. UK Finance Limited trading as UK Finance. Confirmation of Payee is set to be a key weapon in the fight against so-called authorised push payment fraud, which are scams where victims are tricked into transferring money directly to fraudsters. When a customer sets up a new payee or amends an existing payee’s details, they will be able to verify that the account belongs to the person or business they intend to pay before making the payment. The matching decision is made by the intended recipient’s bank, as it has the best knowledge about the name of the person or business that is being checked. That’s why the launch of Confirmation of Payee is so important, as it will provide an extra safeguard against misdirected payments (both accidental and malicious). Confirmation of Payee (CoP) is an account name-checking service introduced by Pay.UK to give businesses and consumers greater assurance that they are sending payments to their intended recipient.. • Use the name, sort code and account number stated on the customer invoice or payment instructions, if these have changed businesses should validate the change with the intended payee using known contact details. 21.02.2020. They call Modulr's API with the borrower's account name, account number and sort code. You will know if you ask to be paid to your registered business name or a trading name. How U Account is challenging financial exclusion by shedding the agency banking model, powered by Modulr, Bitstocks sees bumper surge in transaction volumes, powered by Modulr, How Bitstocks is disrupting the financial services marketplace with Gravity – a solution grounded in Modulr technology. The banking and finance industry is committed to looking after every customer, especially those in vulnerable circumstances. All customers and businesses should follow the Take Five fraud safety advice: Criminals are experts at impersonating people, organisations and the police. We're the 'out of the box' payments plumbing you need to build the next best bank or payment service, quickly and efficiently. The system was unable to verify the account name, typically because the recipient’s bank was not involved. Neobanks are fighting two battles when it comes to fraud. Your name may not be the same as the name on your bank card. The customer can then proceed with the payment. We urge customers to follow the Take Five To Stop Fraud advice. Where an account is not available through the Confirmation of Payee system, whether temporarily or otherwise, a business will be notified that the account is unable to be checked. Show Printable Version; Subscribe to this Thread… MrScrooge. A new code of conduct is now due at the beginning of 2019. Confirmation Of Payee Nowhere To Be Seen In Final APP Code DATE PUBLISHED : FRIDAY, MARCH 1ST 2019 A financial industry framework to tackle particular types of fraud in the UK will come into effect in late May, it was announced late on Thursday, but the regulator has scrapped plans to implement the confirmation of payee system on April 1. Accountants and finance teams, especially at SMEs, are often the target of accounts payable fraud and phishing or social engineering schemes. More information on how to stay safe from fraud and scams is available on the Take Five website. Businesses stand to gain immensely from Confirmation of Payee and the protection it offers against APP fraud. In some cases, businesses may use a trading name or a shortened name that may be different to the name held by the account provider as their account name. They need to protect their customers from falling victim to Authorised Push Payments fraud. Confirmation of Payee is a new way of giving customers greater assurance that they are sending payments to the intended recipient, helping them to avoid making accidental, misdirected payments to the wrong account holder, as well as providing another layer of protection in the fight against fraud. Following the delay to Confirmation of Payee standards in the UK, Chris Stephens, head of banking solutions at identity authentication firm Callsign, gives his perspective on the scheme’s prospects for fighting payment fraud. A number of other institutions are expected to introduce Confirmation of Payee at a later date. Thread Tools . Situations where the name does not match could well be a fraudulent transaction, a scam or a simple error. All rights reserved. The alternatives - bank validation tools - are more expensive, can become outdated, and are relatively easy for fraudsters to opt out of. • Challenge: Could it be fake? A user, either a business customer of Modulr or one of their end users, wants to make a payment. They call Modulr's API with the borrower's account name, account number and sort code. When setting up a new payment, your payment provider will be able to check the name of the person or organisation you give, against the actual name held on the account. is being introduced by Pay.UK and Modulr this year for outbound payments, with inbound payments coming soon. [iv] UK Finance, Fraud – The Facts 2020: The definitive overview of payment industry fraud, 2020. Confirmation of Payee calls on Modulr’s API and automatically checks that the recipient’s name and account details match the information held by their payment service provider. Some firms are required to implement a Confirmation of Payee check for payments made to new recipients through Faster Payments or CHAPS. For example, Confirmation of Payee can’t protect users against swindling schemes, where the payee’s details are real but they’re operating a fraudulent business. This is because the bank will be able to check if the name supplied matches the one it holds for that account. Whatever the business model, we can fit our payments solution around you. The PSR establishes that this is not soon enough. For example, a fraudster may submit a loan approval in someone else’s name and have the loan disbursed to their own account. All rights reserved. Modulr Finance Limited is a company registered in England with company number 09897957 and ICO registration: ZA183068, registered with the Financial Conduct Authority (Firm Reference Number: 900699) as an EMD Agent of Modulr FS Limited. The UK’s six largest banking groups, covering 90% of bank transfers, must fully implement Confirmation of Payee (CoP) by 31 March 2020. The CoP check has been introduced to help reduce fraud and to give you more confidence when making payments. The system then automatically checks the borrower's account name and details. By downloading this document, you understand and agree that any sharing, distribution or republishing of the content, without prior written authorisation from the author or content managers at UK Finance, shall be constituted as a breach of the UK Finance website terms of use. Typically, when a customer or business sets up a new payee or amends an existing payee’s details, Confirmation of Payee will enable them to confirm whether the details they have entered match the account of the person or organisation they are paying. If the customer recognises the name provided, they may opt to proceed with the payment. Confirmation of Payee provides a way of checking account details to give customers assurance that they are sending payments to the intended recipient. Modulr has worked closely with Pay.UK to launch its Confirmation of Payee solution. Only criminals will try to rush or panic you. Invoice fraud involves criminals targeting businesses by posing as a regular supplier and making a request for their bank account details to be changed, often by email. an abbreviated version of the original name rather than a first and last name or with a spelling mistake) they will be provided with the name of the account holder to confirm. Confirmation of Payee will also help to prevent payments from going through in the case of accidental input, by alerting users. At the beginning of August 2019, the Payment Systems Regulator (PSR) issued a specific direction to the UK’s six largest banking groups (Barclays, HSBC including First Direct, Lloyds Banking Group, Nationwide Building Society, Royal Bank of Scotland Group and Santander UK) covering around 90 per cent of bank transfers, to fully implement Confirmation of Payee by 30 June 2020. Whether developing or scaling new technologies, our partnerships help businesses grow faster and go further. [iii] And the impact of fraud on businesses can go beyond financial losses – damaging relationships between companies, suppliers and partners and eroding customer confidence. While Confirmation of Payee will provide an extra level of reassurance to customers it does not automatically guarantee that a fraudulent payment will be detected and that the customer, if they fall victim to fraud, will be reimbursed. , giving businesses and consumers greater assurance that they’re sending payments to a legitimate account. This account check has been specifically designed for the purpose of confirming payee details. A customer should never feel embarrassed or reluctant to check if the payee name is correct. They spend hours researching your business for their scams, hoping you will let your guard down for just a moment. • From 31 December 2019: Directed banks must respond to Confirmation of Payee requests. It is very important to follow the Take Five to Stop Fraud advice: • State whether the payment will be sent to a personal or business account To commit the fraud, the criminal will either access the company’s email system or use spoofing software to email a member of the finance team with what appears to be a genuine email from the CEO. Customers should contact their account provider if they are concerned they may be, or have been, a victim of fraud. Technological change is accelerating and regulations have struggled to keep up. This may not be the name they use. A user, either a business customer of Modulr or one of their end users,  wants to make a payment. • Businesses should consider introducing additional procedures for when they receive a partial/close or no match on a Confirmation of Payee request. accounting. • Ensure their customers and partners are aware of the need to use the correct details when making payments to them. This should protect UK consumers and businesses from losing millions to APP fraud every year. The original Payment System Strategy was targeting 2021 as the deadline for implementing Confirmation of Payee on a new payments platform. The six largest banking groups in the UK (Barclays, HSBC including First Direct, Lloyds Banking Group, Nationwide Building Society, Royal Bank of Scotland Group and Santander UK), who account for 90 per cent of bank transfers, will fully implement Confirmation of Payee by 30 June 2020. Fraud is a major problem for businesses and consumers, and it’s only likely to increase, as criminals constantly seek new ways to steal funds. What kinds of fraud does Confirmation of Payee target? The Confirmation of Payee service gives you greater security when you’re making payments. Confirmation of Payee is a new name-checking process that is being introduced across the UK banking industry. Confirmation of Payee is designed to protect customers against payment fraud . Protect: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud. However, it's important to note that even if Confirmation of Payee detects a match in the name and account details, this doesn't protect against all kinds of fraud. And if a consumer or business is tricked into making a payment to the wrong account, there’s no guarantee of reimbursement, Confirmation of Payee (CoP) is a service that checks account names match up to their correspondent account numbers and sort codes. If a customer thinks they need to change the name their account provider has registered, or is unsure of the name registered, the customer should discuss this with their account provider. Confirmation of Payee will be expanded in time to include other accounts that use a reference number including savings accounts, mortgages and credit cards, as well as to Open Banking initiated payments. The business can then proceed with the payment. It could be possible that they are being targeted by criminals and the payment is being requested for fraudulent purposes. This process will return one of four results: Armed with this information, the user can make a more informed decision when deciding to process a payment. This name is typically their first name and last name. As of today, there is now widespread coverage of the new fraud-prevention tool – referred to as Confirmation of Payee (CoP) – which gives people the additional protection of checking the name of who you want to pay against the account number you are paying. The most important thing that a business can do to prepare for the introduction of Confirmation of Payee is to ensure: 1. So we’re launching a new service called Confirmation of Payee (CoP) that will ask you for their name as well. If the user makes a mistake when manually entering the name, account number or sort code, Confirmation of Payee will detect this. Confirmation of Payee will be a powerful tool in industries such as lending. The user should always stop and question the payment if anything else about the situation seems suspicious. From this date banks must have the capability to talk to each other. Do not use contact details from an email or letter. Modulr FS Europe Limited is a company registered in Ireland with company number 638002, authorised and regulated by the Central Bank of Ireland as an Electronic Money Institution (Institution Code C191242). How to stay safe from CEO fraud: This is when a person is tricked into authorising a payment to a criminal’s account, through social engineering or other means of manipulation. A payee is the term used to describe the person or business that you are paying money to. This could mean the difference between paying money to a correct account or into the hands of criminals. Confirmation of payee works by checking the name of the individual or organisation given by the payer against the name on the account that is being paid. For example, Confirmation of Payee can’t protect users against swindling schemes, where the payee’s details are real but they’re operating a fraudulent business. As well as dedicated developer support. Payment transactions rely on the sort code and account number are to reference an account held by another financial institution and Confirmation of Payee adds an additional layer of protection before a payment is actually made. . It represents a significant step forward towards a safer payments ecosystem. Confirmation of Payee will help you to check account details before you make a new Faster Payments or CHAPS payment. Features, At the moment, Confirmation of Payee is focused on “push payment” transactions, which are payments that customers initiate and authorise from their own account – typically internet or mobile payments rather than payments that are pulled from companies such as Direct Debits. However, it's important to note that even if Confirmation of Payee detects a match in the name and account details, this doesn't protect against all kinds of fraud. The following types of businesses could benefit the most from implementing Confirmation of Payee: Fraud is a major problem for businesses and consumers, and it’s only likely to increase, as criminals constantly seek new ways to steal funds. We’ll introduce CoP this year. Other account providers are also looking to introduce the service in 2020. When using Confirmation of Payee, businesses are less likely to make a transfer to a fraudulent party. To be accredited to use Confirmation of Payee, companies must undergo rigorous security checks and also be regulated by the Financial Conduct Authority (FCA). ©2020 Modulr Finance Limited. For further information click here. • Businesses should use the name given to their account when invoicing customers or providing payment details; if they are unsure what this is, they should contact their account provider. If a customer enters details for the named account holder which do not correspond with the details held by the account provider, they will be told the details do not match. There are four main possible outcomes to the Confirmation of Payee check when a customer is making a payment: If the customer used the correct name of the account holder, they would receive confirmation from their provider that the details match. Customers and businesses should always stop and think before ignoring a Confirmation of Payee response. Confirmation of Payee is a new way of checking account details to give customers (both personal and business) greater assurance that they are sending payments to the intended recipient, helping to avoid misdirected payments being sent to the wrong account as well as offering another important tool to help in the fight against fraud. That’s why the launch of Confirmation of Payee is so important, as it will provide an extra safeguard against misdirected payments (both accidental and malicious). Confirmation of Payee provides a much more reliable and cost-effective alternative, as it draws on the payee’s bank data in real-time. Modulr estimates that every year, neobanks, spend more than £15k per million accounts. Smith, Smythe, Smyth) to ensure the payer has the correct version. Revolut Launches Confirmation of Payee for UK Customers by Polly Harrison January 14, 2021 Revolut has announced the launch of Confirmation of Payee for its more than three million UK retail customers. • Always confirm any bank account details directly with the company either on the telephone or in person before you make a payment or transfer any money. They spend hours researching you for their scams, hoping you’ll let your guard down for just a moment. These attacks are becoming increasingly sophisticated. They should confirm the account details of the person or business they want to pay by an alternative method e.g. "That is now changing with the ‘Confirmation of Payee’ (CoP) service recently launched by the main six UK Banks, in which you are requested to also … accounting, Product guide: Everything you need to know about Confirmation of Payee, Across the UK, millions of consumers and businesses fall victim to fraud every year. • Always check any unusual payment requests directly, ideally in person or by telephone, to confirm the instruction is genuine. In the meantime, if a receiving bank does not offer Confirmation of Payee then the paying customer will be advised that the recipient's (or payee’s) name is unable to be checked. Confirmation of Payee is a new way of checking account details to give customers and businesses greater assurance that they are sending payments to the intended recipient, helping avoid misdirected payments being sent to the wrong account as well as offering another important tool to help in the fight against fraud. Confirmation of Payee. What is Confirmation of Payee and how does it prevent fraud? Built for businesses that need a faster, easier and more reliable way to move money. • Be cautious about any unexpected emails or letters which request urgent bank transfers, even if the message appears to have originated from someone from your own organisation. At this stage, it could be possible that the customer is being targeted by criminals and the payment is being requested for fraudulent purposes. Technological change is accelerating and regulations have struggled to keep up. Confirmation of Payee is a new way of giving customers (both personal and business) greater assurance that they are sending payments to the intended recipient, helping them to avoid making accidental, misdirected payments to the wrong account holder, as well as providing another layer of protection in the fight against fraud and scams. Bacs payments, including Direct Debits, may also be subject to these checks depending on the provider. Confirmation of Payee checks domestic payments only, so it will not be applied to inbound or outbound international transfers. are processed, only the account number and sort code are matched when processing any kind of payment – there’s no safeguard to ensure that account names match up with account numbers. Why is Authorised Push Payment fraud on the rise? [ii] UK Finance, Fraud – The Facts 2020: The definitive overview of payment industry fraud, 2020. It’s ok to reject, refuse or ignore any requests. Received: 1 Given: 0. Customers and businesses are advised not to respond to any communication concerning Confirmation of Payee that does not come from their account provider or another trusted source. Confirmation of Payee only includes sterling payments transacted within the UK, so it will not affect foreign currency payments or international transfers, sent or received. If a customer is unsure about how Confirmation of Payee will affect them or have any questions, they should contact their account provider or look at their website. • Someone changing their name or payment account. The average amount lost in each incident was £2,760. They should always remember to stop, challenge and protect themselves, particularly when faced with: The name registered to an account should be available in communications that customers have with their account provider and through their online or mobile applications. estimates could have prevented £320m-worth of bank transfer fraud since 2017. This latest feature forms part of Pay.UK’s anti-fraud initiative and adds to Revolut’s award-winning anti-fraud features.

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