A new ‘confirmation of payee’ safety measure will allow you to check exactly who you are transferring money to under new fraud rules that come into force today.
Six major banks, including Barclays and HSBC, have introduced new security checks for all customers who transfer cash to friends, family, businesses and other payees.
The new system, known as ‘confirmation of payee’, was first introduced in October 2018 and becomes law on Tuesday, June 30 .
It’s part of efforts to clamp down on fraud which costs the UK economy more than £130billion a year.
To make a transfer, you usually have to submit the recipient’s account number and sort code.
You can also send over their name, though in the past, banks haven’t been legally obliged to verify this.
This loophole meant fraudsters were able pose as other people to trick customers into sending money to other accounts.
But from June 30, you’ll be able to ask your bank to carry out a name check before sending out any money.
They’ll be able to check that the name on the account matches the name you’re sending money to – and if it doesn’t, they will notify you.
It means you can check who your cash is really going to, and stop the payment if necessary.
The June rules will apply to faster payments and CHAPS. Bacs payments, which are often used by employers to pay staff, will be added later in the year.
First Direct, Halifax, Lloyds, RBS (including NatWest), Nationwide and Santander will introduce it on June 30 . TSB said it will follow by October 2020 .
Importantly, you’ll only be able to request the safety check if both banks are on the scheme. It also won’t apply on international payments