By Julian Goldsmith, 22 July 2008 11:49
NEWS
Financial administrators feel being unprepared for the Single Euro Payments Area (Sepa) directives could expose businesses to an increasing level of Direct Debit fraud.
The Sepa initiative seeks to create a common framework for cross-border Euro payments, using a single bank account and a single set of payments instruments across an area stretching from Ireland to Poland.
Instruments for credit transfers started last January, while processes for Direct Debits and debit cards should be in place by the end of 2010.
Cheat Sheets
♦ Basel II
♦ MiFID
♦ Sarbanes-Oxley
In a survey conducted by Experian of 180 corporates a third felt there was a lack of information on the migration to Sepa instruments. A similar amount considered Direct Debit fraud to be a main concern as thieves move away from payment card-based activities.
In a survey conducted by Experian in April, 98 per cent of respondents have no plans to enhance payment fraud checks as they join Sepa, even though the increased volume in high speed transaction processing could expose their systems to frausters.
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1. John Everhard
The report on debit fraud risk reflects a concern on the part of financial administrators in those businesses behind the game in getting ready for the Single European Payments Area (Sepa).
Yet arguably there is an easy answer to this, using tried and tested tools already in common use. Direct debit fraud could be reduced substantially by putting in place a relatively simple process-driven ‘utility’, using the power of an embedded rules engine to intercept every request to set up or amend a direct debit instruction.
Then, by using Service-Oriented Architecture (SOA) techniques, the same tool could both check for consistency in the direct debit request against that customer’s account details and at the same time contact the customer via their preferred method of communication to double-check that the request is indeed valid.