Building Societies Association
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Press release
A MEDIA RELEASE FROM APACS, BBA AND BSA ON CHANGES TO THE WAY PEOPLE SHOULD WRITE THEIR CHEQUES
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Date: 25 Aug 2006 		Print page  |   Email 

In one month's time people writing cheques made payable only to a bank or building society will need to break that habit. Instead they will have to add extra details about the beneficiary of the cheque, like the name or account details. This is because from October 2006 banks and building societies are likely in certain circumstances to decline cheques made out to only a financial institution.

The new arrangements are intended to make it absolutely clear who should benefit from the funds and help prevent fraudsters paying in stolen cheques.  As banks and building societies hold accounts on behalf of  millions of customers, if the cheque is made payable simply to "XYZ Bank/building society", there is nothing to identify which of those  account holders should benefit from the funds.  By making a cheque payable to "XYZ Bank" and adding the "account number" or "name" it is clear who the funds are intended for.  Cheques made out to personal or business customers will be unaffected. 

These changes were announced last December and are designed to help tackle fraud. Since then, the industry has, been advising people to start adding the extra details immediately, through leaflets and information on cheque books and statements.  

The industry has worked closely with the Financial Services Authority, the independent body that regulates the financial services industry in the UK, on this initiative. The revised procedures are consistent with advice given in The Banking Code.

Commenting on the changes, Ian Mullen, Chief Executive of the British Bankers' Association said,

"The new arrangements reflect the importance that financial institutions place on fraud prevention.  Although the instances where fraud has occurred in these particular circumstances are fortunately few, it is crucial that the industry continues to make life for the criminal as difficult as possible.  The new measures are simple, but provide additional security when a cheque is made payable to an institution such as a bank or building society and follow good practice guidance that is included in the Banking Code."

Commenting on the changes, Adrian Coles, Director-General of the Building Societies Association said,

"It is important that the industry is vigilant about any new fraud. In this instance, it came to our attention that cheques which were written only to an institution, not a named account, had been used in a fraud.  We want to stop that happening again. People need to get into the habit of adding extra details to their cheques now, rather than risk a cheque being declined next month."

Commenting on the changes, Paul Smee, Chief Executive of APACs said,

"Although most of us are handling cheques less and less - on average, we only pay in one cheque every two months - this small change to the way we write them will have a big impact on fraudsters. The industry is helping to reduce the opportunities for criminals to commit fraud, as well as minimising the chances of anyone falling victim to such scams. It is a positive change that is definitely worth making."

More information on how to write cheques can be found at http://www.bsa.org.uk/consumer/factsheets/101067.htm or you can order a leaflet by calling the BSA's helpline on 020 7437 0655.

CONTACT DETAILS

Rachel Blackmore, Building Societies Association - (t) 020 7440 2218 / (m) 077 66 33 2164 / rachel.blackmore@bsa.org.uk
Brian Capon, British Bankers' Association - (t) 020 7216 8989 / (m) 07860 682215 / brian.capon@bba.org.uk

Changing the way you write cheques - safeguarding against fraud
Notes

  1. Notes to Editor:

    1. From October 2006, cheques that are payable simply to a bank or building society and which are not being paid into the drawer's own account are likely to be refused by the bank or building society involved.  The new arrangements will not affect payments being paid into the drawer's own account, or cheques used to pay a utility bill or credit card bill in the drawer's own name.  Cheques payable to an individual or other business will not be affected.  In 2005 there were over 1.9 billion cheques processed in the UK but only a small number are made out to financial institutions and will be affected by this change.  Cheque fraud in the UK amounted to £40.3m in 2005 (down 13% on 2004).

    2. The British Bankers' Association (BBA) is the principal trade association for banks operating in the UK.  It has 218 member banks and many professional associate members.  BBA member banks collectively employ over 400,000 staff in the UK. 

    3. The Building Societies Association is the trade association for the UK's building societies. There are 62 building societies in the UK with total assets of over £270 billion. About 15 million adults have building society saving accounts and over two and a half million adults are currently buying their own homes with the help of building society loans.

    4. APACS is the UK trade association for payments and for those institutions that deliver payment services to customers. It provides the forum for its members to come together on non-competitive issues relating to the payments industry. We currently have 31 members whose payment traffic volumes account for approximately 97% of the total UK payments market.

    5. Photographs of Adrian Coles are available from the BSA press office, or from the Association's website at www.bsa.org.uk or Headline Money www.headlinemoney.co.uk

    6. Photographs of Ian Mullen are available from the BBA press office, or from the BBA website www.bba.org.uk 

    7. Photographs of Paul Smee are available from the APACS press office or from the APACS website at www.apacs.org.uk

    8. APACS publishes a booklet called Cheques & Cheque Clearing The Facts, which provides an overall picture of how cheques work. A PDF of this booklet is available to download from www.apacs.org.uk