When the sale of Heather Lord’s house was completed, her legal counsel attempted to transfer funds to her bank account. An automated message warned him that his name did not match the name of the account he was paying into and that the transfer would therefore be done at his own risk. Lord was confused.
“I called the bank and asked who I was,” she says. “They told me I was Ms. Heather Audrey Lord. This was also refused by the system! Since we didn’t want to risk my money going missing, I requested a check payable to Heather Lord which was processed without issue.
She is one of dozens of Observer readers to be questioned about their identity after a new name-matching system adopted by banks refused to recognize them.
Confirmation of Payee (CoP) was introduced at the end of June to allow customers to verify that the name of the person they want to pay matches the name on the account. Before that, the systems only checked the account number and sort code. This gave crooks a free hand to pose as a trusted account holder and trick clients into transferring money.
As online fraud skyrockets, the new program is designed to secure wire transfers, and activists say it is long overdue. It should be simple: If a customer enters the name of a person or business, as it appears in their bank account, a match – or partial match – needs to be confirmed. The problem is, it’s so secure that some customers are unable to send or receive money without ignoring the dire warnings that they proceed at their own risk.
Readers have reported angry builders, held up cars, delayed home sales, and missing wages because the protocols used by different banks themselves don’t always match.
Louise Abbott-Little was unable to receive payment because her name was deemed too long by the sender’s bank for correspondence, while Judith Mallinson discovered that her company name had been extended by her bank to for correspondence. “Our business is called BowWowMiaow Doggy Day Care, which can be quite difficult to operate properly,” she says. “Our bank insists that our business account name is BowWowMiaow Doggy Day Care Ltd T / A BowWowMiaow Dog and we have received reports from a few people that they were unable to set up payments.”
Some systems do not recognize spaces between initials, hyphenated last names, or ampersands. Some require a middle name or title, even if they don’t appear on bank statements, while joint account holders find that only one name – often male – is accepted for matching. .
Robert May shares an account with his partner. “A friend tried to transfer money using my partner’s full name, with and without the middle name initial, and it all failed. It only worked when they replaced my name, ”he says.
Celia Pillay has been stranded trying to transfer funds from her account to a joint account with another bank that she holds with her husband. “He failed the CoP test five times, even when I used the account name as it printed on the checkbook,” she says. “I was finally told that the beneficiary, for the purposes of this system, was only the primary account holder. I don’t know how I was supposed to know this.
Banks say the name should be entered as it appears on the account, leaving customers to guess when a business name is different from a registered name, or if there is a personal title included. Wilfred Underwood attempted unsuccessfully to pay businesses and individual traders using the name on invoices. “I could give someone my name on my bank statement, my debit card, my checkbook or my credit card – only two are alike!” “
Customers can choose to ignore a no-match message and continue, but they are warned that their money may not be recoverable if it ends up in the wrong account.
Lucy Walsh says she was forced to ignore this message or endure long waits on her bank’s hotline on multiple occasions when a properly formatted name was flagged as invalid. Each time, the payment went to the intended account, despite the warning. “I am concerned that this system, in its current form, will serve to protect the banks rather than the customers,” she said. “Customers can only complete the transaction by ignoring the bank’s warning, thus releasing the bank from liability. If it’s a large amount, I transfer a small test payment and call the recipient.
Banks tend to blame each other. Freelance writer Machteld de Waard was left behind because a Lloyds client was unable to pass the CoP to pay into her Nationwide account. Numerous appeals to Nationwide have failed to resolve it.
When the Observer intervened, Nationwide criticized Lloyds for inserting a comma incorrectly and Lloyds criticized Nationwide for not allowing at least a partial match. Nationwide eventually paid £ 100 with goodwill and admitted that the matching protocols and algorithms were complex and banks were still looking for an optimal approach.
The retail payments authority, Pay.uk, has set the rules and standards for CoP and says it is an important step to protect customers, as push payment fraud allowed, where customers are tricked into paying money into a fraudulent account, increased by more than 40%. last year and cost £ 455million.
“There is an industry-wide set of rules and standards for CoP, but within these individual banks have a certain degree of flexibility to develop their own criteria. ‘specific pairing. This reflects the fact that different banks use different name formats, ”he says. “The cases of clients having problems are extremely low compared to the number of requests processed successfully. As a best practice, customers should use the full first name (not initials) and last name, or the full name of the business they are paying.
Reader Jo Driscoll is in despair. Three people failed to get a name match while trying to transfer payments from three different banks, even after their bank confirmed the correct format.
“They all made the payment anyway, having been told it was at their own risk, and the money arrived safely,” she said. “If others aren’t willing to take the same risk, I won’t get paid. Checks are being phased out, so where do we go from here? “