Starling and a number of other banks are introducing a new measure designed to combat financial fraud. It’s called Confirmation of Payee and it’s designed to ensure that when you pay someone, the right person or business receives it. This is done by matching the exact details they give you, most notably their name, as well as their account number and sort code, with all the details on the account.
So if you try to make a payment to “Mum” you’ll get a message saying there’s no one at that bank called “Mum” and that you should enter the correct account name.
What is changing?
Confirmation of Payee is a new name-checking process that is being introduced across the UK banking industry. Existing security measures, when setting up a new payee, include your bank checking that there is an account with that number at the bank you’re trying to pay. With the introduction of Confirmation of Payee, participant banks have added additional checks to confirm the name on the account is who you think it is - providing an extra level of security.
How am I affected?
Whether you are a business or an individual, and whether you are paying a business or another individual, you will be affected by the new name-checking service every time you set up a new payee or edit an existing payee.
The next time you set up a payee or edit an existing payee on your phone one of the following messages will appear in app:
- The bank details and payee details match.
- Close but not quite. The account is actually registered to (the actual account name registered). Please update their details and try again or contact the recipient to double check it’s really them.
- The bank details and payee details don’t match. You can continue creating this payee but we suggest you contact the person or organisation you’re trying to pay as this could be fraud.
- The recipient’s bank doesn’t offer Confirmation of Payee. You can continue creating this payee but we suggest you only proceed if you’re sure the name and the account number are correct.
What if someone is paying me?
The new payment rules will also mean changes if you are receiving a payment from someone else who has an account with one of the participating banks. You will need to share the full name you have registered on your account. This should mean you receive your payments without any roadblocks.
What type of payments are covered by Confirmation of Payee?
Any time you set up a new payee in pounds sterling, the name will go through a Confirmation of Payee check. This includes one off payments and standing orders. This will not affect international payments as Confirmation of Payee is a UK directive.
Which banks are involved?
The UK payment regulator has instructed Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, Royal Bank of Scotland Group and Santander UK to sign up to this scheme. Starling has voluntarily signed up to the scheme - it’s part of our commitment to do all we can for our customers to combat fraud.
When will these changes take place?
You will begin to notice a change in how you set up new payees in-app from July.
- When paying someone for the first time, make sure you have the exact name they have registered on their bank account. So, as we said earlier, payments to “Mum” will be challenged.
- This will only affect new payees you set up. But for good practice, it is worthwhile updating any payees where you have used a nickname. This would be just one more step you can take to reduce the chance of being a victim of fraud.
- When someone is paying you, remember to give them the full name you have registered on your bank account. Maybe your friend only knows you by your middle name, but they will need the full name on your bank account.
What does Confirmation of Payee mean for my business?
Confirmation of Payee helps make sure that when you pay a supplier, it goes to who you intend. It also means that when your customers are paying you, the money goes to you and not a fraudster.
As a business, you need to:
- Make sure you have the right account payee names when you pay your supplier.
- Make sure your customers have all they need to pay you, which means your account name, number and sort code.
- If you trade under one name, but are registered under another, make sure you are giving your customers the one listed on your bank account.
- If you are paying a supplier, check with them that their trading name is the name listed on their bank account.
Sole trader accounts:
- The official name on the account is your personal name and not your trading name.
- To ensure that your customers input the correct account name when paying your sole trader account, please make sure you are using your personal account name.
Staying safe from fraud
Keeping your money and personal details safe is our top priority. We’ve worked hard to make sure you have the very best in technology to protect you. Introducing Confirmation of Payee is one more way in which we are helping you to stay safe.
Remember, if you spot something unusual, or don’t feel comfortable, always stop and think before you proceed.
Blog amended: 30th June 2020