Community

The problem comes when Government decrees banks are responsible not only for getting funds to the correct party, but also what the beneficiary does with them. We need to be much clearer about the distinction between bank and consumer responsibilities or further restrictions will follow. 

The banks need to get their arms around this before liability escalates. COP is patchy and it is unreasonable to give identity risk to the consumer. In the cheques world, this risk rests with the banks who are far better placed to accept it and the system works well. If the same princinciple was applied here it would be much easier to defend those more difficult claims that transactions should have been blocked because they were not in the remitter's best interests.

Tony talks a lot of sense here (as he always does). Consumers are wary of push payments because there is no certainty of payee identity. As Tony says, there are many means by which this can be achieved but banks will never agree amongst themselves which scheme is best and when it should be adopted, so Government intervention is essential. The model for this is the Cheques Act which says it is the banks’ responsibility to ensure a cheque payable to Tony McLaughlin reaches Tony’s account and insists they put matters right if it does not. It has worked very effectively for more than 60 years  and I commend it to the PSR!