New Rules for Cheques Agreed
New agreement to cut down on cheque fraud reached
7th December 2005
The Financial Services Authority (FSA), the British Bankers' Association (BBA) and the Building Societies Association (BSA) have agreed to make changes to the way cheques made out to banks are handled, to prevent a specific type of fraud recently uncovered.
Cheques made out to a bank, for example a credit card payment, could potentially be intercepted by a fraudster and paid into his or her own account. Rare though this would seem, real life incidents of this kind prompted the FSA to discuss preventative measures with the two associations.
As a result of the agreement, from October next year cheques made out to financial institutions will also need to include extra information such as the account holder's name on the payee line on the front of the cheque if it is to be cashed.
Read More: FSA: New practice will better protect consumers from cheque fraud
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