UK Banks are implementing a new technique to stop some of the most basic money transfer fraud schemes.
Currently, if a consumer wants to transfer money, they are asked for the recipient’s account name, account number, and sort code. However, banks do not currently check if the account name is correct. And this leads to lots of fraud.
Starting next year they will begin checking the name of the payee account to make sure it is accurate before funds are transferred. Customers will be given 3 possible outcomes before the funds are transferred
- If they used the correct name, they will receive confirmation that it matches and the payment will be processed.
- If they used a close match to the payee account, they will be provided with the actual name to validate. They can then update the details and try it again.
- If the name is no match they will receive a message that the name does not match the name on the payee account.
Scammers Took Advantage
In the last few years, scammers have taken advantage of this loophole in the system and tricked consumers into sending payments to accounts that did not belong to the people that they think it did.
The Guardian had featured a few of these cases and consumers had lost up to 130,000 GBP in this schemes.
You can read some examples here – Email scam costs couple £25,000 – but no one will help
Many UK banking consumers are wondering why this drop-dead simple check could not have been done years ago.