Home.co.uk
Home.co.uk

News: FSA moves on cheque fraud

City watchdog, the FSA (Financial Services Authority), has agreed with the British Bankers' Association (BBA) and Building Societies Association (BSA) to changes to industry practice that 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 of fraud, 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 September 30th 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.

As Philip Robinson, Financial Crime Sector Leader at the FSA, puts it: "In reaching this agreement with the FSA, the BBA and BSA have helped to end a practice that was exposing consumers to the small possibility of fraud.

"We were concerned that consumers were at risk following the recent incident of fraud in this area, and we are pleased that the industry has responded positively to our calls for change."

The BSA has produced a leaflet that provides information on what the changes will mean for consumers. To see a copy of this leaflet, please access the BSA website (www.bsa.org.uk).

Back to: News Index