Fraud victims will continue to lose £1m a day to criminals with a vital prevention measure still six months away from being introduced.
The name-check system, long touted as the best way to combat the scourge of bank transfer fraud, will be introduced in March next year following years of delays, the Payment Systems Regulator (PSR) announced today.
More than £354m was lost to bank transfer fraud, where criminals trick consumers into authorising payments into their accounts, last year.
When making an online bank transfer consumers are prompted to enter a payee name but this is not checked against the name registered on the account.
The “confirmation of payee” system will cross-reference the name entered with the name on the receiving account and flag any discrepancies.
As bank transfer fraudsters often divert funds from a legitimate source, experts say the system will wipe out a large proportion of cases.
It was initially meant to be implemented this summer but has been subjected to long delays.
Louise Buckley, of the PSR, said: “UK banks have a clear deadline by which they need to have the systems in place to make sure that people are better protected from this devastating crime, and that it stops those payments from being made in the first place.”