Top banks have been accused of leaving vulnerable customers at risk of fraud after failing to implement vital safeguards.
TSB, Virgin Money and Metro Bank are among those criticised for not using confirmation of payee (COP) checks, which were introduced by most rivals last year.
They aim to stop fraudsters from pretending to be someone else and tricking victims into sending them money. The checks mean that those sending cash must enter the recipient’s correct name. If account details do not match, the bank can block payment.
Failure: TSB, Virgin Money and Metro Bank are among those criticised for not using confirmation of payee checks
This should, for example, prevent criminals contacting victims and telling them they need to pay money to a legitimate-sounding account such as HM Revenue & Customs.
But TSB, Virgin and Metro have all failed to put the extra safeguard in place, prompting concerns among other banks.
The issue not only affects customers of the banks but also anyone who sends them money. James Daley, of Fairer Finance, said the ‘time for excuses was running out’ for banks that were yet to implement the safeguards.
Rival banks feel frustration at TSB because it processes a higher number of transactions. It was one of several quizzed by Home Secretary Priti Patel last month on how they were stopping fraud funding organised crime.
The conversation focused on COP checks, according to a person familiar with the talks. One industry source claimed: ‘TSB are the bank most likely to be the weak link. We can’t flag fraudulent payments to a TSB account if they aren’t in the COP system, because we can’t see there isn’t a match.’
Losses to so-called authorised push payment fraud, where the victim is tricked into approving a payment, totalled £207.8m in the first half of last year.
Referring to the fact that TSB’s parent, Spanish bank Sabadell, put the UK lender up for sale at the end of last year, the banking source added: ‘You have to wonder if TSB are not bothering to put the technology in for COP checks because they know they are going to be sold.’
A spokesman for TSB denied this and said: ‘We are aiming to introduce confirmation of payee in the coming weeks.’ Virgin said it plans to implement the checks ‘later this year’. Metro has said it has no plans to introduce them.
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