On 9 May 2019, the UK’s Payment Systems Regulator (PSR) published a Consultation Paper announcing a delay of the implementation deadline of ‘Confirmation of Payee’ (CoP). You may access the Consultation Paper here. CoP, was due to come into force by 1 April 2019 but will now be pushed back until 31 December 2019.

CoP is a name-checking system that the PSR and payments industry has identified as an important tool to help prevent authorised push payment (APP) scams. According to UK Finance, £354 million was stolen by fraudsters from UK banking customers in 2018 through authorised push payment fraud. The CoP system will check whether the name of the account that a payer is sending money to matches the name they have entered. The objective of implementing CoP is to reduce losses from APP scams and accidentally misdirected payments in electronic bank transfers.

Difficulties in meeting the implementation deadlines, the impact on different types of Payment Service Providers (PSPs) and the need to clarify standards and guidance on CoP were identified by the PSR as the main reasons for delaying the proposed measure. The PSR has now proposed specific directions to the UK’s six largest banking groups (Lloyds Group, Barclays Group, HSBC Group, Royal Bank of Scotland Group, Santander Group and Nationwide Building Society). The specified PSPs must be able to respond to CoP requests from 31 December 2019 and must be able to send CoP requests and present responses to their customers from 31 March 2020.

Gareth Shaw, Head of Money Content at consumer group Which? claims that consumers will lose GBP108.75 million during the nine-month delay:

Delays to the introduction of vital name-check security leaves millions of customers vulnerable to losing life-changing sums of money as a direct result of this missed deadline…This system, which would cut losses to bank transfer fraud in half overnight, should have been introduced years ago. Banks and the regulator must urgently work towards its implementation.

The PSR has set out a voluntary code which outlines the protections and standards that will be implemented by PSPs with respect to APP scams. This voluntary code will apply from 28 May 2019.