27th NOVEMBER 2018
Name checks to be implemented by banks to prevent fraud
Requests from the UK’s payments operator - which monitors the UK's major payments systems - has changed how our banks will process cheques from July 2019. Pay.UK have provided details on how this new Confirmation of Payee system will work, and as asset fraud has become a big concern in our industry sector as well as push payment scams on the increase, we have provided the details on upcoming changes by banks to combat these issues in time for Brexit.
Preventing push payment fraud
A new system has been designed to tackle fraud cases known as Push Payment Fraud, whereby fraudsters catfish consumers – this means impersonating or mimicking genuine businesses, and convince consumers to send money to the fraudster’s account, and is also known as Authorised Push Payment Fraud. A total of £145m has been stolen from consumers via push payment fraud this year alone.
With the new system, banks will be able to name-check the account of the person or company you are paying in order to help prevent this, which will be extremely beneficial to businesses who do not currently have an efficient and effective verification process in place when it comes to verifying evidence of assets. It’s important to verify the legitimacy of any suppliers involved when making business transactions and with this extra security step from your bank, your business transactions will be much safer, giving you peace of mind.
Changes to processing of bank cheques
Currently, the account holder name isn’t used when making a transaction using a bank cheque; only the sort code and account number are relevant for a money transfer. After inputting these details, the payment is normally confirmed almost immediately.
From July 2019, if you include the sort code and account number but not the account holder name, or if you input the incorrect account holder name, then the transfer will not be completed. If an incorrect account holder name is entered, the sender of the cheque will be informed by your bank that the details aren’t right in the form of an alert, and you will be asked to contact the recipient you are trying to pay, thus bringing to your attention any potential fraud. If there is no fraud involved, after you input the correct name, you will receive confirmation that the details match, and the payment has been made.
If you input an account holder name that is similar, but not correct, your bank will provide you with the actual name of the account holder to check. You can then update your transaction with the correct details and try to send over payment again, or if needed you can pick up the phone and call the person or business to check their details.
This new name-check system is crucial and will help to protect your business from fraud – these are particularly welcome measures when it comes to asset finance. At Davenham, we have our own effective and meticulous verification processes and have authored many articles on fraud. If you have any queries regarding these changes or would like some helpful advice on secure asset finance provision, please contact our expert team on 0161 832 8484.
Preventing push payment fraud
A new system has been designed to tackle fraud cases known as Push Payment Fraud, whereby fraudsters catfish consumers – this means impersonating or mimicking genuine businesses, and convince consumers to send money to the fraudster’s account, and is also known as Authorised Push Payment Fraud. A total of £145m has been stolen from consumers via push payment fraud this year alone.
With the new system, banks will be able to name-check the account of the person or company you are paying in order to help prevent this, which will be extremely beneficial to businesses who do not currently have an efficient and effective verification process in place when it comes to verifying evidence of assets. It’s important to verify the legitimacy of any suppliers involved when making business transactions and with this extra security step from your bank, your business transactions will be much safer, giving you peace of mind.
Changes to processing of bank cheques
Currently, the account holder name isn’t used when making a transaction using a bank cheque; only the sort code and account number are relevant for a money transfer. After inputting these details, the payment is normally confirmed almost immediately.
From July 2019, if you include the sort code and account number but not the account holder name, or if you input the incorrect account holder name, then the transfer will not be completed. If an incorrect account holder name is entered, the sender of the cheque will be informed by your bank that the details aren’t right in the form of an alert, and you will be asked to contact the recipient you are trying to pay, thus bringing to your attention any potential fraud. If there is no fraud involved, after you input the correct name, you will receive confirmation that the details match, and the payment has been made.
If you input an account holder name that is similar, but not correct, your bank will provide you with the actual name of the account holder to check. You can then update your transaction with the correct details and try to send over payment again, or if needed you can pick up the phone and call the person or business to check their details.
This new name-check system is crucial and will help to protect your business from fraud – these are particularly welcome measures when it comes to asset finance. At Davenham, we have our own effective and meticulous verification processes and have authored many articles on fraud. If you have any queries regarding these changes or would like some helpful advice on secure asset finance provision, please contact our expert team on 0161 832 8484.