New sort codes ‘could cre­ate fraud risk’

The Daily Telegraph - Your Money - - YOUR MONEY - Sam Mead­ows

Rules in­tended to strengthen Bri­tain’s bank­ing sys­tem mean around a mil­lion cus­tomers will have their bank­ing de­tails al­tered.

HSBC is the first of the banks to change ac­count num­bers and sort codes for 170,000 cus­tomers, re­sult­ing in sig­nif­i­cant dis­rup­tion as pay­ments are redi­rected and cards are re­placed.

The process – which will also mean tens of thou­sands of cus­tomers have to re-en­ter stored pay­ment de­tails into ser­vices such as Ama­zon – will ex­pose con­sumers to the risk of fraud, HSBC has warned.

New “ring-fenc­ing” rules laid down by the City reg­u­la­tor mean banks must sep­a­rate con­sumer bank­ing di­vi­sions from the rest of the firm’s op­er­a­tions, prompt­ing the change at HSBC. In some cases cus­tomers’ sort codes link their ac­counts to what will in fu­ture be­come the “wrong” di­vi­sion. These cus­tomers need new ac­count de­tails.

The rule changes ap­ply to any bank with more than £25bn in re­tail hold­ings, mean­ing that Bar­clays, Lloyds, RBS and San­tander could also be af­fected. The new rules come into force in 2019.

HSBC has said it would trans­fer di­rect deb­its and stand­ing or­ders – as would hap­pen if you used the bank­ing in­dus­try’s switch­ing ser­vice and moved to a new provider al­to­gether. So pay­ments to util­ity firms, em­ploy­ers, spouses, friends, sav­ings in­sti­tu­tions and much else be­sides should be moved over for cus­tomers au­to­mat­i­cally – but crit­ics have warned that dis­rup­tion is in­evitable.

In ad­di­tion, cus­tomers them­selves will have to up­date their ac­count de­tails for many on­line re­tail­ers and other ser­vices they use.

Con­sumer group Which? has warned bank cus­tomers to be on the look­out for cold-call­ers and fraud­sters try­ing to take ad­van­tage of the dis­rup­tion.

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