Just recently I've noticed excel is automatically creating a backup copy of the file I am or have been working on. It is putting the backup file in the same folder as the primary file.

Can someone explain why this started to happen and tell me how to turn this feature off?

Thanks.

Dunno why it just started, unless you (or someone else) changed a setting. But saving backups of your work is pretty standard stuff for Excel and other Office apps. Take a look at your settings (File, Options, under Save); there's info there, that you can control, about autosaving what you're working on, how often and when.