According to the British Bankers Association (BBA), the new rules simply clarify a measure that has always been the recommended practice, but has not always been followed.
The changes, developed by the BBA and the Building Societies Association (BSA), mean that from October, cheques that are payable simply to a bank or building society and which are not being paid into the drawer's own account are likely to be refused by the bank or building society involved.
The new arrangements will not affect payments being paid into the drawer's own account, or cheques used to pay a utility bill or credit card bill in the drawer's own name. Cheques payable to an individual or other business will not be affected.
The need for a tighter control on the way banks and building societies handle cheques of this sort has been highlighted by an investigation into a fraudulent independent financial advisor.
According to The Guardian, the advisor had instructed some of his investment clients to write cheques made out simply to the institution in which they wanted to invest, but then paid the cheques into his own account with that institution.
While the rules will not come into force until October 2006, the industry is advising that people start adding the extra details now, so that they benefit from greater protection immediately.
"The new arrangements reflect the importance that financial institutions place on fraud prevention,” said Ian Mullen, Chief Executive of the British Bankers' Association. “Although the instances where fraud has occurred in these particular circumstances are fortunately low, it is crucial that the industry continues to make life for the criminal as difficult as possible."
The Financial Services Authority, the regulator for the financial services industry, has welcomed the changes.