In today’s evolving banking landscape, ensuring secure and accurate banking transactions is paramount. Confirmation of Payee (CoP) stands as a powerful safeguard, assuring the precise allocation of funds. Confirmation of Payee was built to tackle the increasing numbers of APP Fraud and in the landscape of UK banking, the spectre of APP fraud looms large. In 2022, over £1.2 billion was stolen by fraudsters through authorised and unauthorised fraud, equivalent to more than £2,300 every minute. This statistic emphasises the urgent need for robust security measures like CoP. While over £1.2 billion was stolen through fraud in 2022, there was an eight per cent reduction compared to 2021 which highlights the positive outcomes obtained from the implementation of Confirmation of Payee. The number of fraud cases across the UK also decreased by four per cent to nearly three million cases during the same period; latest statistics from UK Finance.
Recently, the UK Finance 2023 Half Year (January 2023 to June 2023) Fraud Update reports a two percent decrease in fraud, totalling £580 million stolen by criminals, countered by banks’ advanced security systems preventing £651 million theft. Social engineering tactics, including scam calls and fake websites, persist, focusing on obtaining personal details for Authorised Push Payment (APP) fraud. While APP fraud decreased by one percent (£239.3 million), purchase scams rose 43 percent, accounting for 66 percent of cases. Investment scams, constituting nearly a quarter of losses, slightly reduced to £57.2 million. Notably, 77 percent of APP scams originated on online platforms, emphasizing the urgency of collaborative efforts across sectors to address the growing national security threat posed by fraud.
Confirmation of Payee (CoP) is a vital security measure adopted by financial institutions and payment service providers. Its core purpose is to confirm that the recipient’s name matches the information provided by the sender during a banking transaction, ensuring that funds are transferred to the correct payment account.
How CoP works?
Key benefits of CoP
- Enhanced Security: CoP serves as a robust defence against accidental or malicious fund transfers, ensuring funds are allocated correctly.
- Error Prevention: It reduces funds being misdirected as a result of errors in entries from the payer, creating a clean and reliable transaction experience.
- Fraud Prevention: CoP is very effective against various scams, especially some types of authorised push payment (APP) fraud, thwarting the plans of cybercriminals.
- Builds Trust: Knowing that their bank diligently verifies recipient information, especially in substantial transactions, instils confidence in users.
In essence, Confirmation of Payee plays a pivotal role in digital banking, guaranteeing the flawless execution of banking transactions. It stands as a guardian against fraud and misallocation, demonstrating the commitment of financial institutions to safeguard their clients’ assets. The next time you engage in a banking transaction, remember the invaluable role of CoP in ensuring the security of your financial interests.
