The UK's faster payment project: avoiding a bonanza for cybercrime fraudsters

Publication Date09 May 2008
AuthorJonathan Fisher
SubjectAccounting & finance
The UK’s faster payment project:
avoiding a bonanza for
cybercrime fraudsters
Jonathan Fisher
London School of Economics, London, UK
Purpose – The purpose of this paper is to consider the increased exposure to cyber crime which
would result if one-day cheque clearance were introduced in the UK.
Design/methodology/approach – This paper undertakes a comparative analysis of the UK and US
cheque-clearance systems, examines the enhanced vulnerability to fraud occasioned by a one-day
cheque clearance system and considers the resulting evidential difficulties encountered in US cheque
fraud prosecutions. The paper then anticipates the UK experience and examines recent cyber-crime
cases in the UK. Finally the paper explores the possibility of biometric fingerprint authorisation as a
prevention strategy.
Findings The introduction of one-day cheque clearance in the USA heralded an increase in
cyber-crime banking fraud and a reduction of the ability of the prosecuting authorities to bring cases
to court because of the paucity of documentary evidence. The same pattern of activity would be likely
to occur if one-day cheque clearance were to be introduced in the UK. Banks should lobby for the
replacement of cheque banking with biometric fingerprint authorisation of electronic banking
transactions as the best way forward.
Practical implications This paper indicates the most pragmatic way forward for banks targeted
by this type of cyber-crime and warns the legal profession of the evidential difficulties in US
Originality/value – This paper is of value to legal practitioners, academics, students and financial
market professionals with interests in banking, fraud, and cyber-crime.
Keywords Fraud, Banking,Electronic commerce, United Kingdom,United States of America,
Data security
Paper type Research paper
The UK is on the threshold of introducing a faster cheque clearance system for the
processing of cheques. The proposed change is consequent upon the Cruickshank
report which uncovered profound competition problems and inefficiencies in the
market for money transmission services. Some of these problems will be only too
familiar to bank customers: slow clearing cycles for cheques and automated payments,
and high charges for cash withdrawals (Cruickshank, 2000, para. 36). As Cruickshank
noted, many of these problems can be traced back to the structure of the UK payment
systems market which consists of a series of unregulated networks, mostly controlled
by a few large banks who in turn dominate the market for services. The key benefit
resulting from the proposed change is for customers who accept cheques. For the first
time a customer will be certain that after six working days funds cannot be reclaimed
The current issue and full text archive of this journal is available at
This paper was presented by Jonathan Fisher QC at the 25th International Symposium on
Economic Crime held at Jesus College, University of Cambridge, on the 6 September 2007 at
Session XIV entitled “Banks as Victims of Fraud and Financial Crime”.
UK’s faster
payment project
Journal of Financial Crime
Vol. 15 No. 2, 2008
pp. 155-164
qEmerald Group Publishing Limited
DOI 10.1108/13590790810866872

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