New rules have been introduced in the UK requiring consumers to write checks that are made payable to a specific person rather than just to a bank or building society.
Consumers who still write checks made payable only to a bank or building society may have their check declined under the new rules. In addition, to help safeguard against fraud, banks and building societies are now recommending that extra details, such as the name or account details of the beneficiary of the check, should be added.
The new arrangements, which were first announced in December 2005, are intended to make it absolutely clear who should benefit from the funds and help prevent fraudsters paying in stolen checks. The move should not come as too much of a surprise to consumers as, since the changes were first announced, the banking industry has been advising consumers to add the extra details.
Commenting on the changes, Paul Smee, chief executive of UK payments association Apacs, said that although checks are becoming less and less popular as a form of payment, the changes will minimize the chances of check fraud being committed and thus have a big impact on fraudsters.
Checks made out to personal or business customers will not be affected by the changes.