Debt Collection and Bank Checks

Debt Collection and Bank Checks – When Banks are finally using common sense again…

Debt Collection and Bank Checks; a new service called ‘Confirmation of Payee’ that has been designed to help protect your payments from scams, fraudsters and payments going to the wrong account.

In future, when you pay someone new using Faster Payments (including standing orders) or CHAPS, you’ll be able to check the name on their account against the details you provide, to make sure you’re paying the right person. If someone makes a new payment to you, their bank may do the same.

What do I need to do?

If you’re paying someone new:

• Find the precise account name of the person or company you are paying. For joint accounts, the first and last name of either individual should be accepted
• You’ll need to know the type of account you’re paying to – either personal or business account
• If you get a partial or no match, double check you’re paying the right person/company. If you choose to continue with the partial or no match against the details you provide, the payee’s bank provider may not be able to get the money back if it goes to the wrong entity

If someone else is paying you:

• Please make sure you give your full name (first name and surname, or precise business name) to anyone who is setting up a new payment to you. This should match exactly the account name as written on your cheque book

 Nearly 20 years after the introduction of the IBAN, the banks have gone full circle, but presenting this as a brand-new safety mechanism. Have they only just realised that a unique identifier is simply not safe enough and that it has most probably been the biggest contributor to the huge increase in fraudulent transactions over the last 20 years? And I am convinced that both personal and corporate identity theft have also drastically increased for that same reason.

As a back-end debt collection agency, we come across several cases each month, where honest but careless buyers have paid large sums of money in advance in a bank account for which the account holder’s name does not match the company they intended to do business with. This has been a great opportunity for fraudsters to get money for nothing in a much easier way than ever before.

In a world where my 12-year-old daughter can open a bank account online, remotely, in less than one hour, uploading photos of ID documents and utility bills which can so easily be falsified with today’s OCR software, it is unbelievable that this unique identifier farce has lasted for so long.

This was never rocket science. Banks have always had visibility in this area; why did they think that stopping to verify the bank account holder’s name against his/her account number was ever a good idea? And this, with the full backing of the European Committee for Banking Standards (ECBS) and for 20 years! Simply beyond belief. They have placed this responsibility on their customers who never had any proper means of checking with any certainty who they were paying, creating great losses for them and never admitting to any liability. Could this be time for compensation?

CLI specialises in debt collection and international debt collection with over 10 years of successful support to businesses.