Cheque-writing habits due a change

29 August 2006
From October 2006, cheques made payable only to a particular bank or building society will not be accepted in a bid to clamp down on fraud.

Under current rules, financial institutions will generally authorise payments through cheques even if they are not made out to a particular payee.

However, the new rules state that cheques which do not have a name or account number will be required to contain this kind of information to make it harder for thieves to cash stolen cheques.

"The new arrangements reflect the importance that financial institutions place on fraud prevention," said Ian Mullen, chief executive of the British Bankers' Association.

"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," Mr Mullen concluded.

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