In order to reduce fraud, confirmation of payee has been introduced for bank payments.
This service aims to tie up payments to the correct account name, whereas in the past only the sort code and account number was used. At present, the new systems work for faster payments or standing orders, as well as for chaps payments.
Only the six major banks are required to use the service, and have an extended deadline to implement it by the end of June due to the current situation.
When making a payment you are required to input the name, as well as whether the payment is business or personal, and the usual sort code and account number.
The systems will advise one of four possible outcomes:
1) Exact name match
2) Partial or close name match
3) No name match
4) The system is unavailable for the bank you are paying
For an exact match, you can proceed with the payment. However if you have a partial match you should double check things, whereas with no match the transaction should be cancelled and payment not made until further investigations are performed.
One thing that appears to have also happened with new systems is the removal of punctuation in either the account name or reference used.
Payments have recently not been able to go through where there was punctuation in a company name, but have processed ok by just removing the punctuation and using spaces instead.
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