The Payment Systems Regulator (PSR) has published its consultation for Confirmation of Payee (CoP) rules to protect people from Authorised Push Payment (APP) scams.

Together with the new, voluntary code, designed by the industry and consumer groups, CoP will see consumers better protected from APP scams and have a greater chance of being reimbursed if they do fall victim.

Hannah Nixon, PSR managing director, said APP scams have a devastating effect on the people who fall victim. “We have always said that more could be done to protect consumers from this type of fraud – especially around preventing them from happening in the first instance.

“Confirmation of Payee will not only provide people with protection against these scams, but also make sure that other, misdirected payments are prevented in the future as well.

Each year thousands of consumers and businesses fall victim to APP scams when they make a payment to an account that isn’t what they thought it was. Of the £145.4 million lost through APP scams in the first six months of 2018, £93.9 million was attributed to malicious redirection.

In June, the Financial Conduct Authority (FCA) consulted on new measures to help tackle the rise of APP fraud. The PSR already reported concerns, following a ‘super-complaint’ in September 2016 from consumer association Which? to the PSR and the FCA warning about the protection available to victims of APP fraud.

CoP is the industry-agreed way of ensuring that names of recipients are checked before payments are sent. It will work by checking the account name and account details to make sure there is a match. Alerts will notify the payer whether there has been a match or not, meaning corrections can be made before the payment is made.

The technical standards have now been agreed in work coordinated by Pay.UK and are now ready for implementation by banks and other payment service providers (PSPs).

The PSR’s consultation considers whether regulatory intervention is needed to require banks and PSPs to implement CoP. The regulator stated that, for CoP to be effective in protecting both consumers and the banks, it needs to be implemented quickly and be widely available and this consultation seeks views on the most effective way to achieve this.

The consultation considers timescales for introducing CoP, specifically that PSPs must be capable of receiving and responding to CoP requests from other PSPs by 1 April 2019, and PSPs must send CoP requests and present responses to their customers by 1 July 2019.

The consultation is open until 4 January 2019, then the next steps will be to consult on the specific wording of legal directions to be given to PSPs requiring them to introduce CoP.

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