Banking services provider LHV UK is fighting authorized push payment (APP) fraud with the integration of the Confirmation of Payee (CoP) service, now live for all its direct clients.
A fraud prevention system led by Pay.UK and powered by open banking, CoP is a fraud prevention system launched in 2020 that verifies that the recipient’s name matches what the financial institution has on file, according to a press release on Tuesday (June 14).
The CoP system addresses payment errors and the escalating number of APP fraud, where a consumer or a business is manipulated into making real-time payments to fraudsters, usually by social engineering attacks involving impersonation.
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CoP confirms the details of the payee when they use the Faster Payment and CHAPS systems. The system also verifies the information when setting up a Standing Order, according to the release. LHV UK is planning to integrate CoP in two stages, with more functionality added in the future.
“According to the UK Finance, fraud is now the most common crime in the U.K. In the first half of 2021, cases of APP rose by 71% compared to the same period the year before and, for the first time, overtook card fraud in terms of the amount of money stolen,” said Erki Kilu, CEO of LHV UK.
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“With regulators poised to get the power to force banks to reimburse the victims of APP fraud, CoP provides our clients and their end customers with an extra layer of defense against APP fraud and greater assurance that their payments are going to the right recipient,” Kilu added.
The U.K. introduced the Financial Services and Markets Bill in May, empowering regulators to force financial institutions to reimburse APP fraud victims. This bill would supersede the current voluntary approach established in May 2019.
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