New service aims to stop payment fraud

A new service will aim to stop payment fraud by verifying the name of a bank account owner with the name of the intended payee. While confirmation of payee is largely default for consumer banking, Cashroom, who have implemented the service within their client portal, say it is a first in legal services. 

Confirmation of Payee (CoP) is a security feature used in financial transactions to verify that the payee’s name matches the information held by the payer’s bank. It is designed to prevent payments from being sent to the wrong account or to fraudulent individuals or entities. It is, say Cashroom, particularly valuable in preventing certain types of fraud, such as authorised push payment (APP) scams, where individuals are tricked into transferring money to fraudulent accounts.

In practical terms Confirmation of Payee works when a payer initiates a payment; the bank or financial institution uses the Confirmation of Payee system to check whether the name provided by the payer matches the name associated with the account details provided by the payee. If there is a mismatch or if the payee’s name cannot be verified, the payer may be alerted to the potential discrepancy, allowing them to verify the details and avoid making an erroneous payment.

Legal cashiering service Cashroom say CoP can reduce “disruption and delay caused by inaccurate payment details when uploading to the bank” bringing the bank account verification process forward in the timeline and identifying any issues early, avoiding last minute delays.

The roll out of CoP will start in 2024 with the business in the final stages of development; it is calling on firms to actively engage in its BETA program.

Commenting on the innovation Paul O’Day, Chief Technology Officer at Cashroom said

“I’m delighted we have been able to launch this exciting new feature in our platform. This powerful functionality enables our clients to validate payee names against the sort code and account number when setting up payments through the Cashroom portal at the very beginning of the process. In addition to the obvious security and efficiency benefits this feature brings, this feature offers significant benefits in reducing delays in payment processes and eliminates incorrect payments, protecting firms and their clients.

“Our engineering team at Cashroom are constantly working to innovate and build secure, efficient and risk avoidant features to help our clients ensure compliance and this ground breaking new feature is the latest in a line of integrations as we continue to revolutionise legal accounting.”