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man o' the year

No checks

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Today my daughter had a letter from Lloyds bank. She and I had opened an account last year to take advantage of last year's ISA allowance to transfer to a self select shares ISA when she is 18 (tomorrow). This means that the current account has only been used to make transfers into a Lloyds ISA account by ourselves. She has not made any payments nor put the card or account number into any websites. She doesn't have a banking app on her phone (we were asked that so it was a clear suspect route for fraudulent theft of her details).

The letter referred to a failed payment of £525 due to insufficient funds. A direct debit had been set up to make payments from her account on the 13th June.

So 25 mins on phone to Lloyds to cancel direct debit and another 20 mins to the housing agency to whom the payment was being made.

Turns out to be an account 1 digit different. What I am gob smacked by is the fact that there was no other check apart from sortcode and account number - no surname match nor signature check.

Scary! :o

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Bank IT exists at a different level to everyone else.  They have incredible talent (or, at least, effort) at ensuring that each transaction only goes through once, etc.  Then take absolutely  no effort on the customer side.

This is easy to solve -- get the big banks to agree to a 4 digit hash based on account name, number and sort, and add it to the account number to make it 12 digits (or 2 digit hash, whatever). Then get everyone to quote this longer number.  They could even have a tickbox for 'I only have 8 digit account# but I'm willing to take the risk'.  It would remove all of the misdirected funds problems, leaving only 'wrong amount' problems to be dealt with.  Note that this would only really need to be done at web-interface level -- the actual transactions could still go ahead as currently -- so a pretty trivial thing to implement.

But they don't do this.  When I feel positive I think it is because they are so arrogant that their chosen (current) solution is best.  The rest of the time I think it is because their systems actually muck up transfers all the time, and if they couldn't blame customers then we'd realise that it was actually their fault all along.

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