bank sort code-acct number fraud risk?

bikeman

Some time ago Jeremy Clarkson published his sort code and bank account number in a newspaper and promptly became a victim to a direct debit fraud.

http://news.bbc.co.uk/1/hi/entertainment/7174760.stm

Got me thinking. I run a small business and often I have to invoice clients for an initial deposit. My invoice contains my bank name, account number/ sort code and my address. By then they also know my name.

Am I open to bank fraud?

agsnu

How much did Clarkson lose? Nothing.

bikeman

I don't really want to discuss Clarkson specifically and tend to think that a refund was quickly executed only because of who he was.

More disturbing is that someone was able to do this, that the bank refused to identify them and that they were not prosecuted.

dtaylor84

bikeman wrote: »

I don't really want to discuss Clarkson specifically and tend to think that a refund was quickly executed only because of who he was.

More disturbing is that someone was able to do this, that the bank refused to identify them and that they were not prosecuted.

No, anyone is entitled to have their bank refund money taken by Direct Debit in error.

dzug1

Anyone you send a cheque to has exactly the same information in front of them.

In fact more so - they know the exact name of your account rather than just your name which might be in a different format.

agsnu

dzug1 wrote: »

Anyone you send a cheque to has exactly the same information in front of them.

In fact more so - they know the exact name of your account rather than just your name which might be in a different format.

And a copy of your signature...

bikeman

dtaylor84 wrote: »

No, anyone is entitled to have their bank refund money taken by Direct Debit in error.

I don't think a bank would see fraud as 'their error'.

izools

bikeman wrote: »

I don't think a bank would see fraud as 'their error'.

No, they wouldn't see it as their error. This however, is irrelevant.

The Direct Debit Garuntee, entitles anyone who has a bank account with the DD facility, to claim a full and immediate refund from the bank for any amount direct-debited from their account if it was done without the account holder being notified and giving consent first.

I.e. Fraud, Billing Errors, etc. It doesn't have to be a bank error before the DD Garuntee comes in to play

Mikeyorks

izools wrote: »

This however, is irrelevant.

Not quite. In the case of fraud ... most Banks would work the case under their fraud criteria ..... and rule the DD Guarantee out of bounds. As they consider it does not apply where you are not party to the DD Mandate.

An extract from a Financial Ombudsman case study, where a fraudulent DD had been effected :

In this case, as Mr M had not authorised a direct debit, the direct debit guarantee was not strictly relevant. However, after we discussed the position with the firm, it offered Mr M a goodwill payment to cover his consequential losses.