Confirmation of payee not used by some banks and building soceites

eskbanker

masonic said:

The script will no doubt go along the lines of...

"We've set up a safe account for you to transfer your savings into to protect them from the fraudsters trying to steal them. As it has only been created today, I need to warn you that you will get an error about the name not matching. Our systems update overnight, but you can click to continue and make the transfer. It's important that we get your money moved to a safe place as soon as possible."

These threads usually touch on the balance to be struck between security and usability, and there's no doubt that no amount of system-led validation can overcome the social engineering techniques used on the gullible by determined fraudsters!

It's also been highlighted before that CoP facilitates a liability shift from bank to customer - since 2019, the voluntary CRM code has required participating banks to reimburse APP victims, but for those choosing to ignore CoP warnings about mismatching payees, they won't be able to reclaim the lost sums anymore as they'll be deemed to have been negligent.

masonic said:

That said, the actual warning displayed could be made clear enough to break someone out of trusting what they have been told. If the system is rolled out universally, then a statement that "the account you are sending this money to belongs to someone else, and it is not the name you have entered" could be made, rather than "the name cannot be verified" for an account not part of the scheme.

Yes, this was recognised as an issue that'll be particularly relevant during implementation, which should become less so once all PSPs are signed up:

https://forums.moneysavingexpert.com/discussion/comment/78584753/#Comment_78584753

masonic

RG2015 said:

masonic said:

I'm not concerned at all. The humble £1 test payment still has its place, and other systems such as Open Banking or debit card payments are used by some providers not yet part of the scheme.

I am concerned that some savings accounts have minimum opening deposits, such as the Ford Money fixed savers. Hence the £1 test is not possible.

Ford Money is a trading name of FCE Bank which is the payee for all FM savers, distinguished by a unique FM reference / account number.

CoP does work for FCE as a business account although the account/reference is not verified.

In practice I channel all payments to a single Flexible Saver.

If you can make a £1 test payment to their flexible saver and move between that and the fixed term products, then that is a good workaround. Some such products will allow a small test payment, but notify you it was insufficient to open the account and you need to transfer more (e.g. Zopa), while others open a holding account that is used to fund any of their fixed term savings accounts. The requirement to make a single transfer of the whole deposit is not one I've come across for a very long time.

RG2015

masonic said:

RG2015 said:

masonic said:

I'm not concerned at all. The humble £1 test payment still has its place, and other systems such as Open Banking or debit card payments are used by some providers not yet part of the scheme.

I am concerned that some savings accounts have minimum opening deposits, such as the Ford Money fixed savers. Hence the £1 test is not possible.

Ford Money is a trading name of FCE Bank which is the payee for all FM savers, distinguished by a unique FM reference / account number.

CoP does work for FCE as a business account although the account/reference is not verified.

In practice I channel all payments to a single Flexible Saver.

If you can make a £1 test payment to their flexible saver and move between that and the fixed term products, then that is a good workaround. Some such products will allow a small test payment, but notify you it was insufficient to open the account and you need to transfer more (e.g. Zopa), while others open a holding account that is used to fund any of their fixed term savings accounts. The requirement to make a single transfer of the whole deposit is not one I've come across for a very long time.

Thanks @masonic

I recently opened an Atom account and transferred £1 and it was returned immediately. I had not considered that this in effect was confirmation of the details.

The issue here though is probably moot as Atom is part of CoP. 

kaMelo

eskbanker said:

masonic said:

The script will no doubt go along the lines of...

"We've set up a safe account for you to transfer your savings into to protect them from the fraudsters trying to steal them. As it has only been created today, I need to warn you that you will get an error about the name not matching. Our systems update overnight, but you can click to continue and make the transfer. It's important that we get your money moved to a safe place as soon as possible."

These threads usually touch on the balance to be struck between security and usability, and there's no doubt that no amount of system-led validation can overcome the social engineering techniques used on the gullible by determined fraudsters!

It's also been highlighted before that CoP facilitates a liability shift from bank to customer - since 2019, the voluntary CRM code has required participating banks to reimburse APP victims, but for those choosing to ignore CoP warnings about mismatching payees, they won't be able to reclaim the lost sums anymore as they'll be deemed to have been negligent.

masonic said:

That said, the actual warning displayed could be made clear enough to break someone out of trusting what they have been told. If the system is rolled out universally, then a statement that "the account you are sending this money to belongs to someone else, and it is not the name you have entered" could be made, rather than "the name cannot be verified" for an account not part of the scheme.

Yes, this was recognised as an issue that'll be particularly relevant during implementation, which should become less so once all PSPs are signed up:

https://forums.moneysavingexpert.com/discussion/comment/78584753/#Comment_78584753

You would have thought so wouldn't you. However even when the customer has behaved in such a way that even the Ombudsman finds that customer has not met their requisite level of care under the CRM Code including ignoring multiple CoP name mismatches, the bank is still on the hook for half of the losses in these two cases, amounting to hundreds of thousands of pounds.
https://www.financial-ombudsman.org.uk/decision/DRN-3346875.pdf
https://www.financial-ombudsman.org.uk/decision/DRN-3346867.pdf


When banks block payments it is because of people like this and the ombudsman's interpretation of the CRM code.
It's no surprise therefore that banks are blocking more and more payments to protect themselves.

Bigwheels1111

RG2015 said:

masonic said:

RG2015 said:

masonic said:

I'm not concerned at all. The humble £1 test payment still has its place, and other systems such as Open Banking or debit card payments are used by some providers not yet part of the scheme.

I am concerned that some savings accounts have minimum opening deposits, such as the Ford Money fixed savers. Hence the £1 test is not possible.

Ford Money is a trading name of FCE Bank which is the payee for all FM savers, distinguished by a unique FM reference / account number.

CoP does work for FCE as a business account although the account/reference is not verified.

In practice I channel all payments to a single Flexible Saver.

If you can make a £1 test payment to their flexible saver and move between that and the fixed term products, then that is a good workaround. Some such products will allow a small test payment, but notify you it was insufficient to open the account and you need to transfer more (e.g. Zopa), while others open a holding account that is used to fund any of their fixed term savings accounts. The requirement to make a single transfer of the whole deposit is not one I've come across for a very long time.

Thanks @masonic

I recently opened an Atom account and transferred £1 and it was returned immediately. I had not considered that this in effect was confirmation of the details.

The issue here though is probably moot as Atom is part of CoP. 

Last September I joined Atom, first transfer was £50 from FD.

No Issues, the next 2 payment held by FD as fraud.

The first ok, but not the second as had cofirmed the first.

RG2015

Bigwheels1111 said:

RG2015 said:

masonic said:

RG2015 said:

masonic said:

I'm not concerned at all. The humble £1 test payment still has its place, and other systems such as Open Banking or debit card payments are used by some providers not yet part of the scheme.

I am concerned that some savings accounts have minimum opening deposits, such as the Ford Money fixed savers. Hence the £1 test is not possible.

Ford Money is a trading name of FCE Bank which is the payee for all FM savers, distinguished by a unique FM reference / account number.

CoP does work for FCE as a business account although the account/reference is not verified.

In practice I channel all payments to a single Flexible Saver.

If you can make a £1 test payment to their flexible saver and move between that and the fixed term products, then that is a good workaround. Some such products will allow a small test payment, but notify you it was insufficient to open the account and you need to transfer more (e.g. Zopa), while others open a holding account that is used to fund any of their fixed term savings accounts. The requirement to make a single transfer of the whole deposit is not one I've come across for a very long time.

Thanks @masonic

I recently opened an Atom account and transferred £1 and it was returned immediately. I had not considered that this in effect was confirmation of the details.

The issue here though is probably moot as Atom is part of CoP. 

Last September I joined Atom, first transfer was £50 from FD.

No Issues, the next 2 payment held by FD as fraud.

The first ok, but not the second as had cofirmed the first.

I guess that Atom have joined CoP between last September and last week.

eskbanker

CoP doesn't guarantee that payments won't be held by the sending bank - it just provides some validation for the sender's benefit but the bank can still choose to insist on further checks if their algorithms flag up a potential issue.

masonic

RG2015 said:

Bigwheels1111 said:

RG2015 said:

masonic said:

RG2015 said:

masonic said:

I'm not concerned at all. The humble £1 test payment still has its place, and other systems such as Open Banking or debit card payments are used by some providers not yet part of the scheme.

I am concerned that some savings accounts have minimum opening deposits, such as the Ford Money fixed savers. Hence the £1 test is not possible.

Ford Money is a trading name of FCE Bank which is the payee for all FM savers, distinguished by a unique FM reference / account number.

CoP does work for FCE as a business account although the account/reference is not verified.

In practice I channel all payments to a single Flexible Saver.

If you can make a £1 test payment to their flexible saver and move between that and the fixed term products, then that is a good workaround. Some such products will allow a small test payment, but notify you it was insufficient to open the account and you need to transfer more (e.g. Zopa), while others open a holding account that is used to fund any of their fixed term savings accounts. The requirement to make a single transfer of the whole deposit is not one I've come across for a very long time.

Thanks @masonic

I recently opened an Atom account and transferred £1 and it was returned immediately. I had not considered that this in effect was confirmation of the details.

The issue here though is probably moot as Atom is part of CoP. 

Last September I joined Atom, first transfer was £50 from FD.

No Issues, the next 2 payment held by FD as fraud.

The first ok, but not the second as had cofirmed the first.

I guess that Atom have joined CoP between last September and last week.

Atom joined CoP in autumn 2020, so have had it for almost 2 years. They were one of the first smaller institutions to do so.

JGB1955

EdSwippet said:

masonic said:

The humble £1 test payment still has its place, ...

Recently, my bank (first direct) blocked a second large payment that I made after exactly this, a £1 test payment made a day earlier, receipt verified. On having it out with them, they stated that a small payment followed by a much larger one is apparently one of their signals of fraudulent or suspicious account activity, so they blocked the second payment.

This seems bonkers to me, since it disincentivises one of the main ways of verifying payment details absent CoP. I pointed this out. They took no notice. Shrug.

Certainly bonkers - just paid £1 to OakNorth (because Nationwide weren't happy with it) followed by 19,999 10 minutes later (because I knew the first quid was there...)

george4064

Not concerned here. Stick to the £1 'test' payment method and you'll be fine.