• FSA Library
  • Communication documents
    • Press releases

 

FSA/PN/131/2005
7 December 2005

The Financial Services Authority (FSA) has agreed with the British Bankers' Association (BBA) and Building Societies Association (BSA) 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 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.

Philip Robinson, Financial Crime Sector Leader at the FSA, said:

"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 incidences of fraud in this area, and we are pleased that the industry has responded positively to our calls for change.

"Over the coming months, we will continue to work closely with the BBA and BSA as they and their members ensure that consumers are aware of what this new arrangement will mean for them when it comes into effect next October."

Notes to editors

1. 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.
2. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
3. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness