The Growing Reliance on COP—and Its Hidden Weakness
Confirmation of Payee (COP) is gaining traction worldwide as banks and payment service providers aim to curb fraud. On paper, it’s a logical step: verify that the name on an account matches what the payer expects, and block mismatched payments. But in the complex ecosystem of scams, this approach offers something dangerous—a false sense of security.
Fraudsters understand how COP works and design their schemes to bypass it. As scams grow more sophisticated, the industry must confront a hard truth: name-matching is not enough to stop criminals who thrive on deception.
Why Name-Matching Doesn’t Stop Scam Payments
COP was built to address misdirected payments and some forms of authorized push payment (APP) fraud. However, scam-related losses continue to surge despite its adoption. Why? Because COP assumes the account name represents the real individual behind the transaction—a flawed assumption in today’s fraud landscape.
Scammers leverage:
- Synthetic identities: Accounts opened using fabricated personal information that still passes KYC checks.
- Account takeovers: Legitimate accounts compromised and repurposed for criminal use.
- Money mule networks: Individuals—sometimes unwitting—who allow criminals to move funds through their accounts.
In each case, the name on the receiving account often matches what COP checks for, rendering the system ineffective.
Scams Exploit More Than Bank Accounts
COP’s limitations extend beyond traditional banking rails. Increasingly, scam transactions are routed through non-bank channels—such as crypto platforms or payment intermediaries—where COP doesn’t apply at all. As criminals diversify their methods, any solution that relies solely on matching names against accounts will fail to deliver comprehensive protection.
The Regulatory Push and Its Unintended Consequences
Jurisdictions like the UK and Australia have embraced COP as part of broader scam mitigation frameworks. While well-intentioned, this reliance may lead to overconfidence among financial institutions and regulators alike. Banks that treat COP as a primary defense risk regulatory exposure if customers suffer losses despite compliance with this control.
The Real Issue: Identity, Not Account Names
Scams are fundamentally an identity problem. Fraudsters succeed because they can hide behind stolen, synthetic, or mule identities. COP validates only the account label, not the actual human being initiating or receiving funds. For financial institutions serious about reducing scam losses, the solution lies in verifying the true identity behind every transaction, not just confirming that a name matches on paper.
Advanced technologies—such as AI-powered identity verification—offer a path forward. These tools can evaluate real-time risk signals, authenticate individuals rather than just account data, and detect patterns across multiple payment channels.
A Better Way Forward: Identity-Centric Transaction Reviews
Relying on static name checks puts banks in an awkward position: either block a customer-initiated payment based on incomplete data or allow a risky transaction to proceed. Both options damage the customer experience and the institution’s reputation.
A smarter approach is real-time, identity-driven analysis for high-risk wires, Zelle transfers, or unusual transactions. By reviewing these payments behind the scenes—before they leave the bank—financial institutions can prevent scams without telling the customer “no.” This reduces friction, builds trust, and positions the bank as a partner, not an obstacle.
When customers feel protected rather than restricted, retention improves, and brand reputation stays strong. At the same time, the institution shields itself from loss while delivering a seamless experience. In short: better security, better service, and better outcomes for everyone involved.
Moving Beyond Illusions of Safety
COP is not without value, but treating it as a silver bullet for scam prevention is a mistake. To protect customers and reduce financial and reputational risk, banks must move toward identity-centric strategies that address the root cause of scams: anonymity and impersonation. By investing in solutions that uncover the real person behind each transaction, institutions can replace false security with true resilience.
Keep account holders safe—and your reputation strong—with real-time identity checks by Scamnetic.
