The Payment Systems Regulator (PSR) said the bank missed the October 2023 deadline for implementing the confirmation of payee (CoP) system by 14 months, making it the final ‘Group 1’ provider to achieve compliance.

This delay meant that more than 1.14 million new payees, involving transactions totalling approximately £6.9 billion, were not protected by the safeguard which verifies that the recipient’s name matches the account details.

David Geale, managing director at the PSR, said: “Confirmation of payee is a vital tool to combat fraud and misdirected payments, giving people confidence that their money is going exactly where they intend. 

“Bank of Ireland UK had plenty of time to put the system in place, missing the deadline by more than a year put its customers at increased risk of fraud.

“Where we see firms failing to comply with the confirmation of payee requirements and leaving customers without this critical protection, we will use our powers to intervene to make sure this important direction is followed.”

A fine of £3,779,300 has been imposed on the bank.

The original penalty was set at £5.4m, receiving a 30 per cent reduction because Bank of Ireland UK agreed to an early settlement during the enforcement process.