Authorised Push Payment (APP) Fraud is one of the simplest and most effective tools in the fraudsters arsenal. Levelled at companies and individuals alike, it involves tricking somebody into sending money to the wrong person, business, or account. Confirmation of Payee (CoP) is the best defence against this type of fraud.
Most people are familiar with CoP from making personal payments with their bank, as the feature that highlights if the name they enter doesn’t match the name of the intended account.
What is Confirmation of Payee?
Confirmation of Payee (CoP) for businesses is a verification system which checks account name, number, type, and sort code when making business payments. It can be performed individually or in bulk. When the system identifies suspicious or irregular details, it alerts finance teams which can make manual checks and catch fraudulent payments before they’re made.
How does Confirmation of Payee work?
Confirmation of Payee is a simple mechanism, but is very effective as an alert and prevention tool.
It is an extremely robust mechanism, which runs on secure API-driven architecture. Only companies regulated by the Financial Conduct Authority (FCA) or European equivalents to be accredited to use the system.
CoP will cross reference the three primary account details (name, number, sort code) plus the type of account (business or personal) and check for discrepancies. This can be performed individually or in bulk.
Phases of Confirmation of Payee
In AccessPay, CoP checks can made individually, payment by payment, or in bulk:
Single checksTo check a single account, simply enter the details of a beneficiary and submit the verification request. Those details will be checked against the CoP database, and the results will be displayed – highlighting any discrepancies. | Bulk checksTo check multiple accounts in one go, upload a .CSV file into the software and submit the file for verification. The results will be returned in the results table, so you can make line-by-line judgements on the safety of each payment. |
When a CoP check is made, there are four possible outcomes:
Match – if all details match in cross-referencing, the payment can be green-lighted with confidence.
Partial match – if only some details match, the payment is flagged for review. In many of these scenarios it may be a simple error like the name format (middle name vs no middle name etc.) but ultimately still warrants review.
No match – if there is a significant discrepancy, like a totally different name or an incorrect account number, the payment is red-flagged for immediate manual review.
Unable to check – on rare occasions, the system is unable to check any details. This can mean incorrect details, wherein no such account exists at all.
How Confirmation of Payee prevents APP fraud and phishing
APP fraud occurs when somebody is tricked into sending money to an account, usually through deceit where a fraudster pretends to be somebody else. Historically, this has been an easy ploy for the fraudsters and a difficult challenge for banks, businesses, and consumers. A good fraudster will have the research to back up their claim and, without any doubts or an easy way to check their identity, many people will simply make the payment.
Confirmation of Payee utilises the fact that no two bank accounts share the same details. By creating a function to alert you when you are being given false information (like when the name provided doesn’t match the name on record), it will prompt you to make further checks and uncover the fraudster.
Phishing is very similar to APP fraud, though is done exclusively via email and often in huge numbers. Whilst it tends to be a little easier to spot because it’s not targeted specifically at you, there are some phishing campaigns which are complex and incredibly convincing. Confirmation of Payee offers the same protection in these scenarios. However convincing the email, you will always be asked to send money to an account you don’t recognise, or one with incorrect details – which CoP will catch.
Which banks use Confirmation of Payee?
As of 31st October 2023, all UK banks now use Confirmation of Payee. All other payment service providers (PSP) will offer this service by the new confirmation of payee deadline: 31st October 2024.
Fraud & Error Prevention Suite
Confirmation of Payee is just one of several features, including Payment Screening and Sanctions Screening, that make up AccessPay’s full service Fraud & Error Prevention Suite. To protect yourself from external threats and internal mistakes, whilst staying on the right side of the regulators, find out more about the Fraud & Error Prevention Suite.
Discover the power of AccessPay’s Fraud & Error Prevention Suite
Empower your finance teams with the tools they need to verify account details with accuracy and precision.
