Further to my comment above about closed system of payments; there should be and should have been an assurance fee payable on every transaction to cover such events/losses from mistakes and fraud. So far, I have not heard who is going to cover the Masterchef client's loss of $250,000++ Brett Hayton Hayton Kosky
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I wrote this 10 years ago in the ECV environment: It is worth noting I believe the approach taken by ECV to the financial settlement is flawed. One aspect of ECV which really concerned me and that was their approach to disbursement of settlement funds. I can understand their decision but I disagree with the approach and that was – settlement funds can be disbursed by EFT / direct credit to any bank account or bank accounts. That is, it is an open system of payments. As a principal in a law firm, I would be entrusting my staff to enter the BSB and account details for client accounts and third parties which could be any number of accounts for any transaction. Fraud aside, I don’t believe my staff would be comfortable of entering account details as it would involve a lot of time checking and re-checking. As a principal, I am not comfortable with such an approach. So in such an environment, how should payments be tackled? The system of payments ought to be a closed system. Disbursements of funds should only be to subscriber trust accounts registered in the system. This means payments will be disbursed to the Vendor’s mortgagee and the Vendor’s representative’s trust account. Other incidental disbursements could be made to council, water & body corporates, registries & revenue office accounts registered in the system. A closed system I personally would be comfortable with as my staff would be. It is then the responsibility of the vendor’s representative to disburse the funds due to the Vendor in the manner the Vendor directs from their trust account either by cheque(s) or direct credit(s). I understand the money markets and share industry use a closed system of payments where payments are only disbursed to registered subscribers of the respective systems. And that seems to work well and works seamlessly.
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