Proposals drawn up for name-check service to help combat bank transfer scams

The UK’s biggest banks will need to have a name-checking service fully in place by the end of March next year to make it easier for people sending payments to make sure they are going to the right recipient, under proposals from a regulator.

The Payment Systems Regulator (PSR) is proposing that the UK’s six biggest banking groups, who are involved in around 90% of bank transfers, fully put the “confirmation of payee” measures in place by March 31 2020.

Confirmation of payee works by making sure the name of the account someone is sending money to matches the name they have entered.

Alerts will notify the payer when there has not been a match – meaning corrections can be made before the payment is sent rather than people trying to claw the money back after the cash has been transferred.

As well as helping to prevent people sending money to the wrong bank account by mistake, the moves being consulted on are part of wider efforts to give people tricked into sending money to a fraudster better protections.

A voluntary code, developed by the industry and consumer groups, comes into force from May 28, to give more help to victims of authorised push payment (APP) scams, some of whom have previously lost large amounts of money.

Often, people are tricked into sending money by cold-calling fraudsters pretending to be a legitimate organisation such as a business or a government body.

The six biggest banking groups in the UK are Lloyds Group, Barclays Group, HSBC Group, Royal Bank of Scotland Group, Santander Group, and Nationwide Building Society.

The PSR is proposing to give its specific direction about confirmation of payee to the payment service providers in these banking groups – Bank of Scotland, Barclays Bank UK, Barclays Bank, Cater Allen Limited, Coutts and Company, HSBC Bank, HSBC UK Bank, Lloyds Bank, Nationwide Building Society, NatWest, Royal Bank of Scotland, Santander UK and Ulster Bank.

The regulator expects the remaining payment service providers to bring in this important protection at the earliest opportunity, and will keep this under review.

Chris Hemsley, co-managing director of the PSR, said: “People should be properly protected.

“This includes taking steps to prevent the fraud from happening in the first place, and confirmation of payee is an important part of this.

“But it needs to be done in the right way if it is going to help protect people from APP scams and help stop payments being sent to the wrong account.”

The PSR’s consultation closes on June 5.

Read Full Story