Confirmation of Payee (CoP): frequently asked questions

UK banks are introducing a new way to combat financial fraud. It’s called Confirmation of Payee (or CoP for short) and you’ll notice the changes when you make or receive payments from your bank account.




We answer the most frequently asked questions about Confirmation of Payee (CoP) below.

What is Confirmation of Payee (CoP)?

 

It’s an account name-checking service that helps payments reach the right recipients (or payees).

Up until now, when you made electronic payments from your bank account, you gave your bank all the details. This included the account number, sort code and name of the person or organisation you wanted to pay. However, your bank was not able to check the name of the payee.

This enabled criminals to trick people (individuals and businesses) into sending money directly from their account to accounts which the criminals controlled.

Confirmation of Payee (CoP) means that your bank will now check the name on the account you’re paying, as well as the account number and sort code. This helps make sure that payments go to the correct accounts and protect you against fraud.

 

What problem does Confirmation of Payee (CoP) address?

 

Confirmation of Payee (CoP) addresses a £208 million fraud problem. That’s how much was stolen by authorised push payment (APP) fraud in the first six months of 2019 when people were tricked into authorising a payment to accounts controlled by criminals.

This happens to individuals but also to businesses where it’s known as CEO fraud. Criminals pretend to be the CEO or another senior executive and trick staff in the finance department into making payments to accounts they control.

 

How does authorised push payment (APP) fraud work?

 

Essentially there are two kinds of payments: push and pull. CoP addresses problems associated with digital ‘push’ payments, such as Faster Payments or CHAPS.

The biggest and best known ‘push’ payment the world over is cash. When you pay for something in cash, you simply hand the money over. Put another way, you initiate the payment by ‘pushing’ the money towards the recipient (or payee).

This is different to card or direct debit payments. These are ‘pull’ payments. You provide your card or bank details to the recipient, who initiates the payment by ‘pulling’ it from your account.

Most online bank transfers (such as Faster Payments or CHAPS) are the digital equivalent of cash and are ‘push’ payments. The recipient provides their details and you initiate the payment by ‘pushing’ the money to them.

That’s how APP fraud works. Because like with cash, if you pay the wrong person or wrong amount, for example mistakenly hand over a £20 instead of a £10 note, you can’t count on getting your money back.

By contrast, most ‘pull’ payment methods come with in-built protection for the payer. With direct debit, if the payee takes the wrong amount or takes the payment twice, there’s the direct debit guarantee and agreed steps for getting your money back.

 

What is changing?

 

Confirmation of Payee (CoP) allows you to check who you’re paying. It applies when you pay someone new or amend an existing payment instruction.

From March 2020, when you set up a new payee or amend an existing one on your online or mobile banking, you’ll see one of the four following messages:

  • Yes, match — the name and account type (personal or business) you supplied matches the details on the account. If you’re happy with this, you can make the payment. Your bank will never make a payment without your direct authorisation, even if the account names match.
  • Maybe, partial match — the name is close match, the name on the account is ‘Joe Bloggs’. If you’re happy with this, you can make the payment or edit the details.
  • No match — the name you supplied doesn’t match the name held on the account. Please contact the person or business you’re paying to check. If you’re happy that the details are correct, you can make the payment but your bank may not be able to get the money back if it goes to the wrong account.
  • Unavailable — it has not been possible to check the name because the system timed out, the account doesn’t exist or the payee’s bank is not participating in CoP. If you’re happy that the details are correct, you can make the payment but your bank may not be able to get the money back if it goes to the wrong account.

You’ll still need to enter the correct account type (personal or business), account number and sort code to make a payment. And your bank will still alert you if this information is not correct.

 

Which payments are affected?

 

Payments made and received by individuals and businesses using Faster Payments and CHAPS within the UK are affected.

 

What happens when someone pays me?

 

Confirmation of Payee (CoP) also applies when you’re receiving a payment. Make sure you provide the full name you have registered on your bank account to receive payments easily.

 

What does this mean for my business?

 

To pay suppliers easily, make sure you have the right names of their bank accounts.

To receive payments easily, make sure you provide payers with the full name registered on your bank account. If you use a trading name different to the one on your bank account, provide the registered name on your bank account.

 

Which UK banks are participating?

 

The payment systems regulator has instructed the following banks, which account for around 90% of bank transfers, to implement Confirmation of Payee (CoP): Bank of Scotland, Barclays Bank, HSBC, Lloyds Bank, National Westminster Bank, Nationwide Building Society, Royal Bank of Scotland, Santander, Ulster Bank.

 

When do the changes start?

 

The changes start from March 2020.

 

Confirmation of Payee (CoP) implementation timeline: a difficult birth

The account name-checking service that helps payments reach the right recipients (or payees) was first floated in late 2016. Three-and-a-half years, many twists, turns and delays later, Confirmation of Payee is finally being introduced for bank transfers by Faster Payments and CHAPS in the UK.

November 2016

First call for improved protection for payment users through a new payments architecture with the publication of ‘A Payments Strategy for the 21st Century — Putting the needs of users first’ by the payments strategy forum.

December 2017

Design for CoP created, agreed and published by the payments strategy forum as part of its blueprint.

January – June 2018

Authorised push payment (APP) fraud losses

Total cases 34,129

Total losses £148 million

 

July – December 2018

Authorised push payment (APP) fraud losses

Total cases 50,495

Total losses £206 million

September 2018

CoP rule book, operating guide, proposition document and technical specifications first issued, all of which have since been revised.

November 2018

Consultation on CoP proposals, including timelines for implementation: 1 April 2019 for responding to CoP requests, and 1 July 2019 for full CoP implementation to customers.

Use a custom online sign up page

December 2018

The Financial Conduct Authority (FCA) publishes new rules allowing victims of APP fraud to complain to the bank (or payment service provider) receiving their payment.

January – June 2019

Authorised push payment (APP) fraud losses

Total cases 57,549

Total losses £207 million

May 2019

CoP delayed. Revised timelines announced: 31 December 2019 for responding to CoP requests, and 31 March 2020 for full CoP implementation to customers.

Launch of a voluntary code for individuals and businesses to get their money back for some types of APP fraud.

August 2019

Payment systems regulator instructs six largest UK banking groups, covering around 90% of bank transfers, to fully implement CoP by 31 March 2020.

SmartDebit online hosted sign up pages

December 2019

From 31 December 2019, the six largest UK banking groups must respond to CoP requests.

February 2020

Voluntary code for individuals and businesses to get their money back for some types of APP fraud extended to December 2020.

March 2020

From 31 March 2020, the six largest UK banking groups must fully implement CoP. This means sending and receiving CoP requests and presenting the results to customers.

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