Confirmation of Payee – regulatory direction varied ahead of launch

UK Finance report that the finance industry prevented £820 million of unauthorised fraud in the first half of 2019, up 14 per cent on the previous year. Over the same period, UK Finance report that £408 million was stolen by criminals through unauthorised card, remote banking and cheque fraud and a further £208 million was lost to authorised push payment (APP) fraud.

Whilst not a silver bullet the implementation of Confirmation of Payee is expected be an effective way of combatting Authorised Push Payment Scams.

On 1 August 2019, the PSR gave Specific Direction 10 to members of the UK’s six largest banking groups to fully implement Confirmation of Payee by 31 March 2020.

Over the last few weeks the PSR have consulted on a proposal to vary Specific Direction 10 (SD10) on Confirmation of Payee. Although now closed the consultation can be found at:

Two changes to SD10 were proposed by the regulator:

  • to introduce an additional basis (‘justified’) for a directed Payment Service Provider (‘PSP’) to ask for an exemption from an obligation under the direction (the only current basis relates to ‘exceptional’ circumstances).
  • to exempt one bank from the obligations of the direction in respect of accounts held with a sub brand.

Given the importance of the Confirmation of Payee initiative in helping to reduce APP fraud Northey Point was pleased to be able to respond to the consultation.

Our full response can be found in the stakeholder response document which has been published by the PSR at:

In summary, our response argued that:

SD10 already provides for exemptions for to be permitted for ‘exceptional’ circumstances and given the importance of minimising customer detriment and addressing fraudulent and misdirected payments the exemption threshold should remain ‘exceptional’ and, when granted, always include a revised date for compliance (i.e. an end date).

Confirmation of Payee will be most successful in reducing fraudulent and misdirected payments when the full range of join the PSPs directed under SD10. The benefits of the new service should not be diluted by way of open ended exemptions for PSP sub brands, if there is a case for an exemption it ought to progressed under the existing provisions for time- bound ‘exceptional’ exemptions.

The regulator has confirmed that the two changes to SD10 have been agreed and the amended Specific Direction 10 (Confirmation of Payee) (Varied February 2020) can be found at:

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