Bank of Ireland UK Fined Over CoP Delay

The Bank of Ireland UK has been fined £3.78 million by the UK’s Payment Systems Regulator (PSR) for failing to implement the Confirmation of Payee (CoP) system by the required deadline. The fine comes after the bank missed the 31 October 2023 deadline, leaving millions of transactions vulnerable to fraud. This regulatory breach highlights the growing importance of compliance and fraud prevention in the banking sector.

The CoP system is designed to prevent fraud by verifying that the account name entered by the sender matches the account details of the recipient before a payment is processed. This measure is critical in reducing authorised push payment (APP) fraud, where victims are tricked into making payments to fraudulent accounts. Despite the October 2023 deadline set by the UK regulator, the Bank of Ireland UK only activated the CoP system in January 2025, more than 14 months late. During this period, around 1.14 million new payees were onboarded without the crucial fraud prevention check, putting £6.9 billion in payments at risk.

The PSR's investigation concluded that the delay significantly increased the risk of fraud and eroded trust in the banking system. The penalty was reduced from £5.4 million due to the bank's early settlement, but it serves as a stark reminder of the financial and reputational risks associated with non-compliance. The bank has since apologised and stated that the CoP system is now fully operational. It also confirmed its ongoing investment in fraud detection technologies, including AI-based monitoring systems to strengthen its controls.

This fine comes amid tightening regulatory scrutiny on banks, particularly regarding fraud prevention. The UK’s mandatory APP reimbursement scheme, which took effect in October 2024, holds banks financially responsible for fraud losses, further emphasising the need for timely and effective compliance with regulatory requirements. The Bank of Ireland UK's case serves as a warning to other financial institutions about the importance of meeting deadlines and ensuring robust fraud prevention systems are in place.