Biggest banks given deadline for having anti-fraud service

THE UK’s biggest banks must have an anti-fraud service which checks account names when people make payments up and running by the end of March next year, a regulator has said.

The “confirmation of payee” initiative should make it easier for people sending payments to make sure they are going to the right recipient.

The Payment Systems Regulator (PSR) has given a specific direction to the UK’s six biggest banking groups, which are involved in about 90% of bank transfers. The six are Lloyds Group, Barclays Group, HSBC Group, Royal Bank of Scotland Group, Santander Group and Nationwide Building Society.

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 preventing simple mistakes, it should help in the fight against authorised push payment (APP) scams, where people are tricked by a fraudster into sending money to the wrong account.

Such scams often involve criminals posing as legitimate companies.

Earlier this year, a new voluntary industry code was put in place, setting out how victims of APP scams can be reimbursed in certain circumstances.

The PSR had previously suggested the possibility of giving a general direction to banks and payment service providers to implement confirmation of payee by July 1 this year – but it has revised its proposals following feedback which included concerns over difficulties meeting proposed deadlines.