Cheques will have to be addressed to a person, not a bank or building society under new plans to cut fraud.

From next October, people will have to add extra details to the payee line of the cheque, according to the British Bankers' Association and the Building Societies Association.

But the industry is advising people to get into the habit of adding extra details now to avoid cheques being declined when the new rules come into effect.

Cheques to personal or business customers will not be affected by the change.

Adrian Coles, director general of the Building Societies Association said: “It came to our attention that cheques which were written only to an institution, not a named account, had been used in a fraud.

"As a result banks and building societies are changing their procedures to help prevent it happening again."

Ian Mullen, chief executive of the British Bankers' Association, added: "The new arrangements reflect the importance that financial institutions place on fraud prevention.

"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."