LHV UK, a banking services provider to more than 200 Fintech and crypto firms, is pleased to announce its Confirmation of Payee (CoP) service is currently live for all its direct clients.
Introduced in July 2020, CoP is a fraud prevention system that’s led by Pay.UK and operated with Open Banking, which is able to confirm whether the recipient’s name matches the details maintained by the bank.
This process addresses payment errors and increasing incidents of Authorized Push Payment (‘APP’) fraud, where a consumer or a business is tricked into approving a payment to a fraudster’s account.
As noted in the update, CoP supports payments to UK local accounts and checks the payee details when using Faster Payment and CHAPS systems or when setting up a Standing Order.
LHV UK will be implementing the CoP in two different stages.
At present, other participants are able to check whether the names on the firm’s customer’s accounts matches their details.
Additional functionality will be added in the foreseeable future, and LHV UK’s clients may check payee details for outbound transfers when completing a payment.
During the Queen’s speech, at the beginning of May, the UK government introduced the nation’s Financial Services and Markets Bill, which may grant the UK regulatory authorities the power to force banking institutions to reimburse the victims of APP fraud, doing away with the current voluntary approach, which was introduced in May 2019.
Although this improved compensation levels for the victims, the UK government noted that the way it has been applied is inconsistent, and the level of compensation varies considerably between banks.
Erki Kilu, CEO of LHV UK, said:
“According to the UK Finance, fraud is now the most common crime in the UK. In the first half of 2021, cases of APP rose by 71% compared to the same period the year before and, for the first time, overtook card fraud in terms of the amount of money stolen. With regulators poised to get the power to force banks to reimburse the victims of APP fraud, CoP provides our clients and their end customers with an extra layer of defence against APP fraud and greater assurance that their payments are going to the right recipient. “
