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Banks finally introduce 'Confirmation of Payee' – to tell you if you’re paying the right person

Banks finally introduce 'Confirmation of Payee' – to tell you if you’re paying the right person

Millions will soon be told when making a bank transfer online or by phone if the name of the person they think they're paying doesn't match the actual name on the account, to combat scammers and guard against customer errors. And while the 'Confirmation of Payee' roll-out is far from complete, you may see this on some transfers already.

In most cases right now, if you make a payment, it usually doesn't matter if you use the name 'Mickey Mouse' – it'll go to that sort code and account number. This means fraudsters are able to pose as someone else and trick you into sending them money. It is also easy to mistype account details and send money to the wrong place. 

But banks are starting to introduce the long overdue 'Confirmation of Payee' system, which was originally announced in October 2018. It means you can check who your cash is really going to, and stop the payment if necessary – so the onus is still on you to ensure you're happy before completing the transfer.

Some banks have introduced this and some haven't, but it requires the sending AND receiving bank to have the system in place for you to get the real benefit of it.

The six major banking groups – Barclays, HSBC (including First Direct), Lloyds (including Halifax and Bank of Scotland), Nationwide, RBS (including NatWest and Ulster) and Santander – technically have until Tuesday 30 June to implement it for Faster Payments and Chaps payments under Payment Systems Regulator rules. However, the deadline may be moved due to banks having to work through the financial fallout of the coronavirus crisis. 

For more info on preventing fraud, see our Stop Scams guide or Best Bank Accounts for a round up of our top pick accounts.

Martin: 'The sooner banks roll this out, the better, in the fight against scams'

MoneySavingExpert.com founder Martin Lewis said: "This is a step change in the fight against scammers. It is staggering that it has taken this long to get there – banks have put it off again and again. Until it is fully introduced, if someone gives you a sort code and account number, it doesn't matter what the name you put is. They could tell you to put 'HMRC Tax Payment', even if it's an account belonging to Jane Smith, and it'll still go through. What's worse is that few realised, and felt the name meant something.

"Once we have the full 'Confirmation of Payee' roll-out, if there's a mismatch between the name you put in and the name of the account holder, it'll be flagged up, giving you room for pause before you pay. This should really help reduce the number of impersonation scams, and also just plain errors. The sooner banks roll it out across the board for all types of payments, the better."

Which types of transfers will Confirmation of Payee work on?

Of course, as we say above, the sending and receiving banks need to have the system in place for it to work properly. If they do, then for now, with the big six banking groups at least it should apply by the end of June, whether you're paying an individual or company using:

  • Faster Payments – these are the most common transfers which take up to two hours, usually for sums up to £10,000. This is where you're most likely to see it already as some of the bigger banks have already implemented it (see table below).
  • Chaps payments – these you can set up, often for big sums, eg, to transfer money for a house purchase. While these are due for lots of banks by Tuesday 30 June, the roll-out here is far less advanced.

After 30 June, banks will work on launching it for:

  • Bacs payments – which are normally used for direct debits or by companies to pay your salary, so it's rare you'd use it yourself. However, it's unclear when these payments will be covered by Confirmation of Payee. 

It's unlikely to work on international payments any time soon as that requires international co-operation which is very difficult logistically.

Which banks are doing it and when?

As we explain above, the big six banking groups have until Tuesday 30 June to do this for Chaps and Faster Payments, though some have already started. Here's what they and the other banks told us, we'll add more information as more banks roll it out. The ones that have to implement it are bolded – it's voluntary for the others:

Bank What payments can I use Confirmation of Payee on? (1) Available for Faster Payments by
Bank of Scotland Faster Payments and Chaps payments: all customers
Bacs payments: Not yet
Already complete
Barclays Gradually rolling it out to all customers TBC
Clydesdale Bank Not offering it yet TBC
Co-op Bank Not offering it yet End of 2020
First Direct Faster Payments: all customers (for online and phone payments. Mobile payments will be complete by end of June)
Chaps payments: all customers (for phone payments. Mobile payments will be complete by end of June. Chaps payments can't be made online)
Bacs payments: Not yet
Already complete (Online and phone)
Halifax Faster Payments and Chaps payments: all customers
Bacs payments: Not yet
Already complete
HSBC Faster Payments and Chaps payments: all customers (for online, mobile and phone payments. Branch payments will be complete by end of June)
Bacs payments: Not yet
Already complete 
(Online, mobile and phone)
Lloyds Faster Payments and Chaps payments: all customers
Bacs payments: Not yet
Already complete
M&S Bank Not offering it yet (though other banks can check M&S account details) TBC
Monzo Gradually rolling it out to all customers TBC
Nationwide Gradually rolling it out to all customers End of June
NatWest Faster Payments: all personal customers (for online and mobile payments. Branch and phone payments coming soon)
Chaps payments: TBC
Bacs payments: Not yet
Already complete (Online and mobile)
RBS Faster Payments: all personal customers (for online and mobile payments. Branch and phone payments coming soon)
Chaps payments: TBC
Bacs payments: Not yet
Already complete (Online and mobile)
Santander Gradually rolling it out to all customers End of June
Starling Gradually rolling it out to all customers End of June
TSB Gradually rolling it out to all customers October
Ulster Bank Faster Payments: all personal customers (for online and mobile payments. Branch and phone payments coming soon)
Chaps payments: TBC
Bacs payments: Not yet
Already complete (Online and mobile)
Virgin Money Not offering it yet TBC
Yorkshire Bank Not offering it yet TBC
(1) Where we've listed "Gradually rolling it out to all customers" it means the bank is in the middle of its roll-out and it hasn't told us which customers specifically can access it and which can't.

What info do I need to give to use Confirmation of Payee?

For Confirmation of Payee to work, your and the recipient's banks will need to be using it. When setting up or amending a payee, you need to give the same details you've always had to give:

  • Name of payee. The person or business you're sending money to. For Confirmation of Payee, this needs to be the exact name registered to the account (you only need one of the names if it's a joint account). Be aware that if you're sending money to a business, it may use different trading names – double-check if you're unsure.
  • Sort code.
  • Account number.
  • Payment reference. For example, your card or account number if paying a company, or 'cinema' for example if paying a friend.

Additionally for Confirmation of Payee, you need to enter the type of account you're paying – personal or business.

Your bank will then check the records of the payee's bank to see if the name matches.

What results could I get from it?

After the Confirmation of Payee check, your bank will give one of four results. If you're doing a phone payment, you'll be told whether it's a match or not. Online, you'll see the different results (Lloyds Banking Group has kindly shared some images of results you might get):

  • 'Yes, match'. The bank will confirm that the name and details are a match, and you can continue with the payment.
  • 'No, close match'. If you've used a similar name to the correct account holder – for example, if you spelled their name wrong or used a nickname by mistake – the bank will tell you the actual name of the account holder. You can then confirm that the name is correct and continue with the payment, or cancel the payment and contact the payee to check their details.

    In the example below, you might see this if you'd entered Han or Hazan as the payee's first name, rather than the correct Hayan.
  • 'No, the name is wrong'. If the name you've entered isn't close to matching the account details, you'll be advised to cancel the payment and contact the payee. You won't be shown the actual name on the account. You can still choose to continue with the payment, but you'll be warned that this is at your own risk.
  • 'Confirmation of Payee is unavailable'. This could be, for example, because the bank you're trying to send the payment to doesn't have Confirmation of Payee set up, or the account you've entered doesn't exist. Either way, it's worth checking the account name and details with the person you're paying, to make sure you've got them right.

What should I do if the name doesn't match?

If the name doesn't match, you should stop making the payment. Double-check the sort code and account number you've entered, in case you've mistyped a digit.

You should then go back to the person you're paying and check the details with them. If you're paying a company, it's worth confirming the account details by an alternative method, such as a published phone number or official website – as opposed to any details given to you by text or on the phone.

If you think that you're being scammed, stop communicating with the fraudster straightaway and report it to the police through Action Fraud.