Laura Suter, personal finance analyst at investment platform AJ Bell, comments on the introduction of confirmation of payee today:
“It’s good news that new protections have finally been brought in to help stop scammers stealing cash from individuals in bank transfer fraud. It feels slightly unbelievable that in this day and age when you transfer money to someone the bank doesn’t even check that the name and account information match up. But for the largest banks in the UK that will change today.
“The move has been long overdue, taking a long time to be confirmed and then subsequently being delayed due to the ongoing Covid-19 crisis. While the current pandemic is consuming a lot of banks’ time, it shouldn’t be a reason for scam victims to be left out in the cold without these basic checks taking place.
“But this is just the start of the process and all other banks should now be offering these checks too, particularly as more people move away from the big high-street names and to banking with smaller start-ups or digital-only banks.
“This move just puts another hurdle in the way for fraudsters, but it won’t stop them in their tracks entirely. This means that savers need to continue to be vigilant. The easiest way to protect themselves when making a payment to someone for the first time is the £1 test, where just £1 is transferred to someone’s account to test it works, and then you call them yourself to check the money has arrived. This move stops fraud where people’s emails have been hacked and incorrect bank details sent over.
“People should also be sceptical of any calls out of the blue and if they have suspicions should hang up and call their bank back via the number on the back of their card – and ideally from a different phone if they are on a landline. These checks may seem onerous at the time, but it’s far better than losing your life savings and having to battle to get it back.”
