Bank rule shake-up could stop you making a “fat finger” mistake when transferring money

BANKS and Building societies are planning to revamp the way that we transfer money, in an attempt to curb “fat finger” mistakes and fraud.

Under the new plans for payments customers will get an alert asking them to confirm that name of the person they are transferring money to, once they enter an account number and sort code.

Crucially, the alert will be sent before any money has been transferred.

At the moment banks do not cross reference the name of the person you are paying money to with the account that the cash goes into.

This means that cash can easily go into the wrong account - dubbed a “fat finger” mistake.

Banks are only required to put a stop on the money being withdrawn or moved once they've established that a problem has happened - often this means the money is already gone and there is no way of getting it back.

It should also help stop rising fraud problems as scammers will be unable to trick victims into transferring cash into their accounts .

The shake-up is the most radical change since the 1960s, according to the Payment Strategy Forum.

Ruth Evans, chair of the Payments Strategy Forum said: ‘Around £755 million was stolen from UK bank

‘The introduction of Confirmation of Payee and Request to Pay, alongside our longer term solutions for a new payments architecture, will revolutionise the way we handle money, with systems that are fit for purpose in the 21st century.’

She told The Sun Online that the new rules should be in place within the next couple of years.

In September, consumer body Which? Lodged a “supercomplaint” with the financial regulators demanding that UK banks do more to protect customers tricked into transferring money to fraudsters.

Alex Neill, managing director of Which? Home & Legal Services, said: "This is a welcome first step, but is not a cure and won't be enough to protect people from bank transfer scams.

“Many people will be surprised that banks don't already do things like check that the payee name matches the account number.

"With scams on the rise and scammers becoming ever more sophisticated, the financial regulators need to go further to ensure banks adequately tackle bank transfer fraud and safeguard us from scams.”

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