Confirmation of Payee FAQ
Confirmation of Payee is a new system to be used in online banking that will make the recipient’s name as important as their sort code and account number when making a payment. That means when you make a payment to someone, you’ll need their full name or official company name as stated on their bank account, as well as their bank details.
Currently, only the recipient’s bank account number and sort code are needed, and while this check ensures that the payment will be sent to an existing bank account, it doesn’t confirm whether that’s the bank account you really mean to send money to. In practice, Confirmation of Payee will cut down heavily on scammers who pose under other people’s names to steal money.
For a more in-depth summary of what Confirmation of Payee is, check out our earlier blog post here.
Frequently Asked Questions about Confirmation of Payee
How does Confirmation of Payee work?
When you set up a new payment, of amend an existing one, you’ll be prompted to enter the name of the person receiving the payment as well as their bank account number and sort code details. Depending on if the name is correctly matched to their account, you’ll get one of three options:
If you’ve used the correct account name to set up the payment, you’ll see a confirmation screen and the payment will go ahead.
If you’ve used a name that’s similar but doesn’t quite match – such as a different spelling of a common name or a typo error – you’ll be shown the actual name attached to the bank account, and asked to confirm if that’s the recipient you mean.
If you use the wrong name, you’ll be advised that the details don’t match and prompted to contact the person you’re attempting to pay.
How does Confirmation of Payee affect you?
It’ll allow you to check you have the correct account details before you send a bank payment. Therefore, it’s important for businesses to make sure that all invoices and payment instructions have the correct name as held by their bank account, and ensure that customers know they need to use the exact right business name when making payments to them.
When will Confirmation of Payee be introduced?
A number of banks began introducing Confirmation of Payee between February and June 2020, including online and mobile payments. For more information on when this will begin to affect you, contact your bank.
Will existing payments be checked by Confirmation of Payee?
No, payments that are already set up will not be affected. However, if you wish to make changes to an existing payment, you may be asked to confirm the name of your payee.
Will Confirmation of Payee prevent fraud completely?
No, but it’s an important part of fraud prevention, that will mainly catch those attempting to commit APP (Authorised Push Payment) fraud.
What kind of fraud does Confirmation of Payee ward against?
As mentioned above, Confirmation of Payee helps guard against APP fraud. In an APP scam, the fraudster convinces a member of the unwitting public to send them money, by posing as their bank, a legitimate company, or similar, and providing their own bank details for the payment. The victim sends their money, and the scammer disappears. It can be very tricky to get a refund from the bank in such situations because despite not knowing the owner of the account, the customer sent their money willingly – leaving them liable.
Confirmation of Payee won’t be a bulletproof fix for APP scams, as fraudsters could still use their real name and convince victims they work for Barclays (for example) under that name. But, the number of successful scams will still be slashed dramatically.
If you’re interested in preventing fraud, check out our Direct Debit Fraud Prevention Software.