#push payment fraud

The first time I realised that payments are not checked properly was as a local club’s membership secretary.  A member accidentally sent his subscription to a utility company and his smaller utility payment to me.  I spotted the mistake and returned his cheque. The utility company, their bank and the member’s bank processed in full a cheque for the wrong amount and the wrong payee.

With the growth of online banking and “push payment” fraud, the problem has become much more serious.  £145m was stolen this way during the first half of 2018 alone.  UK banks simply do not check whether the receiving bank account has the same account name as the one shown on the instruction to transfer.  If a criminal sends (say) a convincing fake e-mail advising a change of account number and sort code, neither you nor (say) your builder are ever likely to see the money again.  There can also be honest mistakes which are just worrying and inconvenient.

UK banks have rightly been criticised by consumer organisations and others and hence will introduce a “confirmation of payee” system from July 2019.  Briefly, if the account name you use does not match bank records, your bank will ask you to confirm payment or otherwise.  there’s more on https://www.bbc.co.uk/news/business-45900955

There will never be a perfect system and criminals are constantly evolving their techniques, but the new system should be a big improvement.  Between now and July, here are a few ideas which will reduce the probability of being a victim of financial fraud:-

1) Double check bank account details for large payments.

2) Make an initial payment of £1 to check that the right person gets the money.

3) Maybe even give your builder a hand written cheque!