Name checks on customer payments face delay
A system making a recipient’s name as important as the bank account number and sort code when payments are made could be delayed by up to 18 months.
The Confirmation of Payee system means anyone making a payment will be alerted if the name does not match the account.
It is designed to prevent millions of pounds worth of fraud and regulators wanted it to start in July. But UK Finance, which represents banks, said the system would not be ready until “some time next year”.
The Payment Systems Regulator, which will ultimately set the deadline, said it wanted the new rules to be in place as soon as possible, but only when they could be effective.
At present, anyone making a payment adds the intended recipient’s name, but it is ignored by the bank. Only the account number and sort code need to match for the payment to be successful, so fraudsters pose as someone legitimate to trick victims into paying them money.
How Confirmation of Payee 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.
- If you use the correct account name, you will receive confirmation that the details match, so you can proceed with the payment
- If you use a similar name to the account holder, you will be provided with the actual name of the account holder to check. You can update the details and try again, or contact the intended recipient to check the details
- If you enter the wrong name for the account holder, you will be told the details do not match and advised to contact the person or organisation you are trying to pay.