New Practice to Protect Consumers from Cheque Fraud
The Financial Services Authority (FSA) has agreed with the British Bankers’ Association (BBA) and Building Societies Association (BSA) changes to industry practice. These will help reduce the risk that cheques made payable just to a bank or building society can be intercepted by a fraudster and paid into his or her account. Following a recent incident of this kind, the FSA entered into discussions with the industry on how best to change cheque handling practices. As a result, the banks and building societies have decided that from 30 September 2006, the industry will, in a range of circumstances, stop accepting cheques made payable simply to a financial institution. From next year, people will need to add further details, such as the name of the person whose account is to be credited, to the payee line of cheques that are payable to a bank or building society.