Lloyds banking services down for users across the UK
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Confirmation of Payee confirms the details entered matches the person or business being paid when making online transfers. Research indicated one in 10 Britons ignore warnings from the system saying the bank account details don’t match when they are transferring funds, potentially increasing their risk of fraud a hundredfold.
In the same research, less than half of respondents were familiar with the Confirmation of Payee service and understood how it works.
Confirmation of Payee was launched in 2019 and works as a safety check to stop customers accidentally transferring to the incorrect account or filling in the wrong details.
If the system detects an irregularity, such as the name of the payee not matching the name on the account of the details entered, it will urge customers to double check the details.
This is usually the likes of a ‘Confirmation of Payee unavailable’ warning or a ‘No match’ warning.
It provides Britons another chance to check that they have filled in all of the details correctly, potentially saving them from mistakes and fraud.
However, eight percent of UK adults with a bank account admitted they ignore these messages and go forward with the payment without double checking the details.
Roughly 47 percent of the respondents said if given a Confirmation of Payee unavailable warning they would check the details before proceeding.
This warning usually indicates that the recipient bank or payment service provider isn’t signed up to the Confirmation of Payee service so the details cannot be checked.
Even more concerningly, only 24 percent said they understood that a ‘No match’ warning meant they could be getting scammed.
Lloyds turned to their own analysis of outbound transfers to major banks and service providers last year.
This found that transactions involving firms that did not use the Confirmation of Payee service were 100 times “more likely to be reported as fraudulent by customers at a later date”.
They noted this increased risk cannot be solely attributed to the Confirmation of Payee service.
Lloyds highlighted that setting up and paying a new beneficiary is “at the heart of fraudsters’ tactics”, showcasing the importance of Confirmation of Payee.
Currently, all major UK banks use the system but smaller providers are still transitioning.
Lloyds highlighted that it “can’t prevent fraud entirely” but is one of a range of tools used to combat fraud and hold the scammers responsible.
Fraud prevention director at Lloyds Bank, Liz Ziegler, said: “Fraudsters are trying to steal people’s money all the time, they never stop.
“We’re talking about organised crime gangs, constantly inventing new scams to dupe victims out of their hard earned cash.
She urged customers to take note of the warnings and double check the reasoning for the alert: “There’s a big chance it’s because you’re being scammed.”
She concluded: “We urge all payment providers to introduce Confirmation of Payee as quickly as possible.
“We can see it deters criminals now, and if more people take notice of the warnings, it can help stop fraudsters in their tracks.”
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