PSR outlines plans to expand Confirmation of Payee to a further 400 firms by mid-2024

The Payment Systems Regulator (PSR) has outlined plans to extend Confirmation of Payee (CoP) to a further 400 financial firms by mid-2024, according to Which?¹. Under the proposal, a first group of almost 50 firms expected to have the biggest impact on preventing authorised push payment (APP) fraud would adopt CoP by 30 June 2023, and a second group of more than 350 firms would have until 30 June 2024¹.

CoP tells a payer whether the name they have entered matches the account details held by the receiving bank when sending money from one account to another¹. The PSR has said the volume and value of misdirected payments, as a share of all Faster Payments, has fallen by between a quarter and a third since CoP was rolled out, and identified "some evidence that it has helped to curtail the increase in some types of APP fraud", though it did not provide figures for this¹.

The six largest banking groups were required by the regulator to introduce CoP: Barclays, HSBC (including First Direct), Lloyds Banking Group (including Bank of Scotland and Halifax), Nationwide Building Society, NatWest (including Royal Bank of Scotland and Ulster Bank), and Santander¹. They were originally expected to start checks by June 2019, but multiple delays meant this did not happen until 30 June 2020¹. Challenger banks Starling and Monzo were the first to implement CoP voluntarily, and 33 firms now offer it¹. Several key players have yet to fully introduce it, including Metro Bank and Virgin Money, as well as many building societies; Virgin Money started to roll out CoP in April on its app and in-branch¹.

The first group named in the PSR's proposal includes¹:

Rocio Concha, Which? Director of Policy and Advocacy, said:

Why it matters for households

CoP is the check that warns a payer when the name they have entered does not match the account they are sending money to¹. Where a firm has not implemented it, that check cannot be made, so a mistyped account number or a fraudster impersonating a genuine firm may not be flagged¹. The proposal therefore affects customers of the firms in both groups: those in the first group from 30 June 2023, and those in the second group from 30 June 2024, if the plans are confirmed¹.

APP fraud overtook card fraud in the first half of 2021, with victims losing £28,203 an hour, and Which? said in January 2022 that more than £700,000 is lost to bank transfer scams every day¹. Ahead of new legislation that will force banks to help scam victims, confirmed in the Queen's Speech on 10 May 2022, a customer whose bank is signed up to the voluntary APP scam code should be reimbursed if they can show they paid attention to warnings before making the transfer, had a reasonable basis for believing the recipient was genuine, or are considered vulnerable¹. The forthcoming Financial Services and Markets Bill will include measures to protect scam victims tricked into transferring money to a fraudster, making sure victims are reimbursed swiftly and fairly¹.

What happens next

The PSR's proposal sets deadlines of 30 June 2023 for the first group of almost 50 firms and 30 June 2024 for the second group of more than 350 firms¹. The Financial Services and Markets Bill is to include measures on reimbursement of scam victims¹. The PSR has not been reported as having confirmed a final date for a decision on the proposal.