What's Happening?
The UK Payment Systems Regulator (PSR) has reported significant progress in its anti-fraud initiatives, particularly through the Confirmation of Payee (CoP) service. Introduced in 2019, CoP aims to prevent misdirected payments and authorized push payment (APP)
fraud by verifying that the account name matches the account details. The service has been widely adopted, with over 320 organizations offering CoP checks, covering more than 99% of transactions via Faster Payments. The PSR's latest report highlights that over two million name-checks are completed daily, making CoP a routine part of consumer payment experiences. Additionally, the PSR has mandated APP reimbursement since October 2024, resulting in £112 million being reimbursed to fraud victims. The claims process has improved, with 97% of claims resolved within 35 days and 84% within five business days. The success of CoP has inspired similar initiatives in Australia and the EU, showcasing the UK's model as a global blueprint for payment security.
Why It's Important?
The PSR's initiatives are crucial in enhancing consumer trust and security in financial transactions. By reducing fraud through CoP and ensuring swift reimbursement for victims, the regulator is not only protecting consumers but also restoring confidence in the banking system. The reduction in claim volumes suggests that firms are improving their preventative measures, which could lead to a decrease in fraud incidents. The international adoption of similar systems indicates the global impact of the UK's approach, potentially leading to more secure payment systems worldwide. For consumers, the reassurance of reimbursement and improved security measures may encourage more engagement with digital transactions, fostering economic activity and innovation in the financial sector.
What's Next?
The PSR plans to continue its efforts in combating fraud by commissioning an independent evaluation of its APP fraud policies to assess their long-term impact and identify areas for improvement. As part of International Fraud Awareness Week, the regulator is urging consumers to remain vigilant and utilize initiatives like 'Stop Scams 159' to protect themselves from fraud. The ongoing commitment to enhancing payment systems and consumer protection suggests that further advancements and refinements in anti-fraud measures can be expected, potentially leading to even greater security and trust in financial transactions.
