Bank transfers to be name-checked to combat fraud
Anti-fraud measure aims to cut down on authorised push payment scams
From next summer the name of someone receiving a bank payment will be as important as their banking details.
Under the current system, anyone wanting to transfer money must enter the recipient’s name, account number and sort code – although the name is not checked.
“Fraudsters can exploit this loophole by posing as someone else and tricking people into sending money to the wrong account,” says Money Saving Expert - a con known as authorised push payment (APP) fraud.
The BBC says a total of £145m was stolen from bank customers in this way in the first half of the year, “with many victims unable to get the money back because current legislation means they are liable for any losses incurred if they authorise a payment themselves”.
The new plans unveiled by Pay.UK, the UK’s payments operator, will see the sender alerted if the name they enter does not match the account details.
Despite APP scams rising in tandem with the use of smartphones and digital devices to make payments, banks have so far been slow to introduce measures to tackle push payments.
Gareth Shaw, from consumer group Which?, said: “Customers will wonder why banks have dragged their heels and not implemented this system years ago, as it could have prevented a significant amount of fraud. With losses to bank transfer fraud increasing drastically it's clear this measure can't come in soon enough.”