The six largest banking groups in the UK are rolling out a scheme known as “Confirmation of Payee” by the end of the year.
Previously, bank transfer payments will go through as long as you have the account number and sort code right, even if the name is wrong.
It meant consumers could accidentally send payments to the wrong person if they messed up just one number. It’s also a loophole that fraudsters took advantage of.
The new scheme, which was first announced in 2018, lets you check the name of the person on the account before proceeding with the payment. However, it only works if both your banks have signed up to the scheme.
If you bank with Natwest, HSBC or Lloyds, your bank should already have been in touch with you about it. But the roll out at other banks have been delayed by coronavirus.
Santander and Co-Op, for example, are currently aiming for the end of June. Meanwhile, TSB is working to a deadline of the end of October and Barclays is yet to confirm when it will be ready.