Organisations across all industries may feel that taking account information over the phone through a call centre or increasingly as information entered by the customer into an online form is enough. But, alas it is not the case. Here are three key reasons why it’s in the interest of both the organisation and its customers to check bank account data before it is entered into the system, let alone used to make, or receive payments. Jonathan Williams, director of payments strategy, Experian
The recent announcement from Payments UK recognises a key issue in the industry and urges the banking sector to find a solution.
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- The added cost of human error
Information taken by telephone or through an online form can very easily be misheard or mistyped. If it goes unchecked, it’s only when payment fails that the organisation will realise something is wrong. Each failed direct debit is estimated to cost around £50 – not just from banking charges but also the resources used to contact customers to correct the mistake.
- Another avenue for fraudsters
Fraudsters will try and take advantage wherever they can. Direct debit fraud, for example, where someone sets up a direct debit from another person’s account without their permission. Or account takeover, where a fraudster takes over a genuine customer’s account and supplies their own bank account details. This is particularly important when paying money into a customer’s bank account in instances such as; insurance claims, pension payments, benefits, grants or account refunds. Both can be prevented by confirming that the bank account details provided belong to the person that should be making or receiving the payments.
- What will your customers think?
Payments that fail cause problems not only for your company but also for your customers. Customers may not receive the goods or services they ordered, receive late payment notifications or even worse fall victim to fraud as money they are owed is paid into a fraudster’s account. Even if the error is spotted before these things happen you will still have to re-contact your customer to get the correct information from them – trouble for you and for them. Checking bank account data in real-time at point of entry will prevent such incidents occurring.
It’s simple, all organisations should, regardless of sector, incorporate bank account data checking into processes. Some payment service providers, businesses, government and third sectors have already been doing it as standard for the last several years, we’re pleased to see greater focus on this area.
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