Fraudulent bankers draft
Discussion
triple7 said:
A Bankers Draft is a CHEQUE and can be stopped by the issuer just like any other cheque, be warned.
Not so in my experience, if the bank issues it then it cannot be stopped easily.
I bought my last car with 2 drafts - one from HSBC and one from Natwest.
The vendor checked that they were actually issued on the day.
A week later he called me to say that his bank had lost the larger one - £15k worth.
He was a genuine enough chap so I talked to Natwest.
The only way to cancel the original was to return it to them and have the funds credited to my account. In order to get an replacment issued I had to sign an indemnity that if it was ever represented I would be liable.
it makes you think though - if a draft was stolen from you what would they do ?
Say its too bad, you cannot have your money back unless you get it back ?
If funds are not cleared then the bank should not issue a draft - plain and simple. Makes it easier for everyone.
>> Edited by vee on Thursday 1st June 17:54
cptsideways said:
That ID will be being used for other fraud too, may well be worth getting in contact with the likes of Scotland Yard etc, they might be able to check out what other property or loans have been taken out in that name, these people usually try & make a fast buck with such ID.
Otherwise the only other route is to set another sale probably via someone else & try to catch them that way, it'll be the same buyer time & time again.
Obviously try the bank route.
NEVER EVER TRUST A BANK DRAFT - UNLESS YOU'VE SEEN IT WRITTEN OUT IN FRONT OF YOU AT BRANCH
>> Edited by cptsideways on Wednesday 31st May 21:39
Very Good Advice.
There seems like there is a difference of opinion. Is the following correct:
1. You cannot get a bankers draft for money that you don't have in your account. So I can write a cheque for money I don't have and it will bounce but I cannot do the same with a bankers draft.
2. Once you accept a bankers draft that money is in limbo, neither in your account or the persons you have given it to for the time it takes to clear. So after that draft has been issued you cannot spend that money for something else as it is no longer available to you.
3. If the draft is stolen you cannot stop the draft. The only way to stop a draft is to produce it to the issuing bank.
4. Verification of the draft is done by checking the receipt given by the bank and checking with the issuing bank by telephone.
What other reasonable checks can sellers do to cover their backs i.e. make copies of utility bills, driving licence, passport, take a mobile phone picture of the buyer or something - is this enough?
1. You cannot get a bankers draft for money that you don't have in your account. So I can write a cheque for money I don't have and it will bounce but I cannot do the same with a bankers draft.
2. Once you accept a bankers draft that money is in limbo, neither in your account or the persons you have given it to for the time it takes to clear. So after that draft has been issued you cannot spend that money for something else as it is no longer available to you.
3. If the draft is stolen you cannot stop the draft. The only way to stop a draft is to produce it to the issuing bank.
4. Verification of the draft is done by checking the receipt given by the bank and checking with the issuing bank by telephone.
What other reasonable checks can sellers do to cover their backs i.e. make copies of utility bills, driving licence, passport, take a mobile phone picture of the buyer or something - is this enough?
RichyCSL said:
There seems like there is a difference of opinion. Is the following correct:
1. You cannot get a bankers draft for money that you don't have in your account. So I can write a cheque for money I don't have and it will bounce but I cannot do the same with a bankers draft.
2. Once you accept a bankers draft that money is in limbo, neither in your account or the persons you have given it to for the time it takes to clear. So after that draft has been issued you cannot spend that money for something else as it is no longer available to you.
3. If the draft is stolen you cannot stop the draft. The only way to stop a draft is to produce it to the issuing bank.
4. Verification of the draft is done by checking the receipt given by the bank and checking with the issuing bank by telephone.
What other reasonable checks can sellers do to cover their backs i.e. make copies of utility bills, driving licence, passport, take a mobile phone picture of the buyer or something - is this enough?
Perhaps someone else could answer the details, epsecially the processing questions, but two points:
Forget "cleared" - the phrase is has the cheque/draft been "given value" (in other words paid by the issuing bank). Instruments drawn of foreign banks can takes weeks to go through the system - that's how the overpayment scam works.
Secondly, most of your points are irrelevant of the draft is stolen or forged, as is the situation for the OP.
RichyCSL said:
There seems like there is a difference of opinion. Is the following correct:
1. You cannot get a bankers draft for money that you don't have in your account. So I can write a cheque for money I don't have and it will bounce but I cannot do the same with a bankers draft.
Correct. The bank will not give you a draft without you having cleared funds in your account
2. Once you accept a bankers draft that money is in limbo, neither in your account or the persons you have given it to for the time it takes to clear. So after that draft has been issued you cannot spend that money for something else as it is no longer available to you.
Correct
3. If the draft is stolen you cannot stop the draft. The only way to stop a draft is to produce it to the issuing bank.
Correct in my experience, although the draft was lost not stolen.
4. Verification of the draft is done by checking the receipt given by the bank and checking with the issuing bank by telephone.
Correct
What other reasonable checks can sellers do to cover their backs i.e. make copies of utility bills, driving licence, passport, take a mobile phone picture of the buyer or something - is this enough?
Only way I'd accept a draft is to get the seller to give me ID and also get them to collect from a local branch and be with them when this is done.
Oakey said:
There could be a potential business here. Escrow service for people who want to buy / sell used (pricey) cars.
Third party retains both car and money until funds are paid up properly and then transfers over to the respective parties.
Aren't there scams open even with this though? Seem to remember reading something, somewhere, sometime about it
BB
from a buyers position... as someone had previously said, I wouldnt want to provide a large sum of money and then have to 'wait' before collecting the car, surely that could be an opposite scam and i'd never see the money again.
I think the joint bank visit is the best advice. Both the buyer and seller go the sellers bank together, see the draft drawn up, then do the V5/handover.
The only advice i would give is also draw up a formal reciept with both parties (verified) names, addresses, and the details of the transfer along with both signatures.
Okay, it wont help against fake ID etc, but its always handy to have in case of a dispute.
I think the joint bank visit is the best advice. Both the buyer and seller go the sellers bank together, see the draft drawn up, then do the V5/handover.
The only advice i would give is also draw up a formal reciept with both parties (verified) names, addresses, and the details of the transfer along with both signatures.
Okay, it wont help against fake ID etc, but its always handy to have in case of a dispute.
Let's get this clear:
(1) The buyer gave you a bankers' draft made out by RBS.
(2) You presented the draft to RBS and asked their counter staff to confirm it was valid which they did.
(3) RBS credited your account.
(4) Two weeks later RBS debited the money and informed you that the transaction was fraudulent.
A bankers' draft is a cheque drawn against a bank, not the original account holder. This should protect you from the payment bouncing. It does not protect you against fraud.
I would guess something like the following has happened:
The car buyer has impersonated an RBS customer and has had a bankers' draft against their account written out at another RBS branch. You have then presented that draft at your RBS branch. RBS has checked that the two halves of the transaction match, i.e. that the draft you presented matches with the draft drawn against their other customer's account, and has therefore enacted the transfer and credited your account and debited their other customer's account. This would normally take place within the standard 3-day clearing system for checques unless RBS don't bother to use it for internal transfers. Within the next week or so the other RBS customer has spotted that their account has been fraudulently debited and has alerted RBS. RBS has confirmed that the bankers' draft was made out fraudulently and has therefore reversed the transaction.
If there is any chance that RBS can be shown to have behaved negligently, I would suspect it will only revolve around how they established the identity of the person who requested the bankers' draft to be made out. I would be surprised if there was anything negligent about the way they checked the authenticity of the draft at the time you presented it (if it were an outright forgery I very much doubt money would ever have reached your account, because they wouldn't have been able to match the credit against a a debit).
I would ask RBS to explain in reasonable detail the chain of events from their perspective and why they decided the payment was fraudulent. I would try to find out what RBS's statutory obligations are to you. I would try to find out if there is any kind of industry protection scheme that might compensate you.
Initially I'd try to get this info from RBS themselves. Your branch may be helpful because I suspect none of this was their fault and human nature means they may want to make that clear to you even if what they say is to the detriment of other parts of RBS. To that end I'd go in "just looking for an explanation" looking all hurt and confused and would avoid any direct confrontation. See if they let anything slip.
I'd also see if APACS (the UK clearing system for cheques) has any useful info and similarly I'd check things out with the FSA who regulate all UK banks.
Personally I'd go see my solicitor for some proper professional advice. They should be able to tell you precisely what degree of protection the bank has to offer you and will be able to spell out what your options are, how much they may cost, and what the chances are of getting some redress. You're already out of pocket several thousand pounds; a few hundred more to have proper advice is probably worth having.
Good luck.
(1) The buyer gave you a bankers' draft made out by RBS.
(2) You presented the draft to RBS and asked their counter staff to confirm it was valid which they did.
(3) RBS credited your account.
(4) Two weeks later RBS debited the money and informed you that the transaction was fraudulent.
A bankers' draft is a cheque drawn against a bank, not the original account holder. This should protect you from the payment bouncing. It does not protect you against fraud.
I would guess something like the following has happened:
The car buyer has impersonated an RBS customer and has had a bankers' draft against their account written out at another RBS branch. You have then presented that draft at your RBS branch. RBS has checked that the two halves of the transaction match, i.e. that the draft you presented matches with the draft drawn against their other customer's account, and has therefore enacted the transfer and credited your account and debited their other customer's account. This would normally take place within the standard 3-day clearing system for checques unless RBS don't bother to use it for internal transfers. Within the next week or so the other RBS customer has spotted that their account has been fraudulently debited and has alerted RBS. RBS has confirmed that the bankers' draft was made out fraudulently and has therefore reversed the transaction.
If there is any chance that RBS can be shown to have behaved negligently, I would suspect it will only revolve around how they established the identity of the person who requested the bankers' draft to be made out. I would be surprised if there was anything negligent about the way they checked the authenticity of the draft at the time you presented it (if it were an outright forgery I very much doubt money would ever have reached your account, because they wouldn't have been able to match the credit against a a debit).
I would ask RBS to explain in reasonable detail the chain of events from their perspective and why they decided the payment was fraudulent. I would try to find out what RBS's statutory obligations are to you. I would try to find out if there is any kind of industry protection scheme that might compensate you.
Initially I'd try to get this info from RBS themselves. Your branch may be helpful because I suspect none of this was their fault and human nature means they may want to make that clear to you even if what they say is to the detriment of other parts of RBS. To that end I'd go in "just looking for an explanation" looking all hurt and confused and would avoid any direct confrontation. See if they let anything slip.
I'd also see if APACS (the UK clearing system for cheques) has any useful info and similarly I'd check things out with the FSA who regulate all UK banks.
Personally I'd go see my solicitor for some proper professional advice. They should be able to tell you precisely what degree of protection the bank has to offer you and will be able to spell out what your options are, how much they may cost, and what the chances are of getting some redress. You're already out of pocket several thousand pounds; a few hundred more to have proper advice is probably worth having.
Good luck.
Oakey said:You'd think banks or solicitors might offer such a service. The only thing is, at what point does the transfer become irreversible? If the buyer hands over stollen money to the escrow who then duly hands it on to the seller, what is to stop the person who's funds were stollen from getting them back from the seller a few days later? I suspect that is very likely what has happened in this case.
There could be a potential business here. Escrow service for people who want to buy / sell used (pricey) cars.
Third party retains both car and money until funds are paid up properly and then transfers over to the respective parties.
Perhaps the trick would be for the intermediary to offer some insurance, although that would obviously increase the cost of the service.
>> Edited by ATG on Friday 2nd June 11:05
ATG said:
(2) You presented the draft to RBS and asked their counter staff to confirm it was valid which they did.
To be honest, I think this is the critical bit - the rest of the stuff doesn't really matter - the draft was fraudulent (in what way, we don't know) so it's always going to bounce at some point. A more familiar situation is that cheques look "fine", but then bounce sometime later, for a variety of reasons.
The bank apparently said "it was fine". Red Head's mate made an assumption from that statement that it would be OK to release the car. So the key question is, was the bank negligent in saying "it was fine"?
Even if the bank thinks it was OK to say that (as in the Draft appeared to be OK) do they owe a duty of care to their customers such that they ought to have explained more carefully how the draft process works?
fidgits said:
I think the joint bank visit is the best advice. Both the buyer and seller go the sellers bank together, see the draft drawn up, then do the V5/handover.
Well if you're going to do that, you might as well exchange cash - I *think* (maybe somebody involved in banking could confirm?) that that would effective isolate the 2 transactions such that the cash could never be recovered.
deva link said:
(2) You presented the draft to RBS and asked their counter staff to confirm it was valid which they did.
To be honest, I think this is the critical bit - the rest of the stuff doesn't really matter - the draft was fraudulent (in what way, we don't know) so it's always going to bounce at some point. A more familiar situation is that cheques look "fine", but then bounce sometime later, for a variety of reasons.
The bank apparently said "it was fine". Red Head's mate made an assumption from that statement that it would be OK to release the car. So the key question is, was the bank negligent in saying "it was fine"?
Even if the bank thinks it was OK to say that (as in the Draft appeared to be OK) do they owe a duty of care to their customers such that they ought to have explained more carefully how the draft process works?
I don't see how they can be held responsible at that point. If the fraud took place when the buyer asked for the draft to be written out, there would be no way for RBS to pick up that problem when the draft was being presented back to them. If there was any negligence involved, I think it would only have happened when the draft was originally being prepared.
maserati3200gt said:
That ID will be being used for other fraud too, may well be worth getting in contact with the likes of Scotland Yard etc, they might be able to check out what other property or loans have been taken out in that name, these people usually try & make a fast buck with such ID.
Otherwise the only other route is to set another sale probably via someone else & try to catch them that way, it'll be the same buyer time & time again.
Obviously try the bank route.
NEVER EVER TRUST A BANK DRAFT - UNLESS YOU'VE SEEN IT WRITTEN OUT IN FRONT OF YOU AT BRANCH
>> Edited by cptsideways on Wednesday 31st May 21:39
Very Good Advice.
Here’s a question:
What happens when some crim takes out a fake draft, puts that into another interim bank account, then uses that as the source of their funds (while the draft hasn’t bounced), thereby ‘enabling peace of mind’ of the seller who insisted on going to the bank to get the draft drawn up on site – would the bank be liable for the fraudulent loss or could they still pass the liability onto the seller?
ATG said:
(2) You presented the draft to RBS and asked their counter staff to confirm it was valid which they did.
To be honest, I think this is the critical bit - the rest of the stuff doesn't really matter - the draft was fraudulent (in what way, we don't know) so it's always going to bounce at some point. A more familiar situation is that cheques look "fine", but then bounce sometime later, for a variety of reasons.
The bank apparently said "it was fine". Red Head's mate made an assumption from that statement that it would be OK to release the car. So the key question is, was the bank negligent in saying "it was fine"?
Even if the bank thinks it was OK to say that (as in the Draft appeared to be OK) do they owe a duty of care to their customers such that they ought to have explained more carefully how the draft process works?
I don't see how they can be held responsible at that point. If the fraud took place when the buyer asked for the draft to be written out, there would be no way for RBS to pick up that problem when the draft was being presented back to them. If there was any negligence involved, I think it would only have happened when the draft was originally being prepared.
I think that the banks negligence *might be* in not defining "it was fine", so that it allowed the customer to believe he could rely on the draft.
Red, sorry to hear about this - what a bloody mare!
I'd get legal advice from a solicitor and get the solicitor to send a letter pronto to the bank to draw out what position (on the facts and the law) is being adopted by the bank.
If the fraudulent nature of the draft was not reasonably apparent (to a bank in the position of RBS) upon (a reasonable) examination, RBS may nevertheless have acted in breach of duty if it failed to make reasonable inquiry of the issuing branch. Put another way, what reasonable grounds did the bank have for verifying the draft?
Given the amount at stake, you should definitely get legal advice from a solicitor (and get the facts investigated by that solicitor while witnesses at the bank may still be available and employed by your mate's branch) and adopt a firm stance if he gives it the thumbs up.
I'd get legal advice from a solicitor and get the solicitor to send a letter pronto to the bank to draw out what position (on the facts and the law) is being adopted by the bank.
If the fraudulent nature of the draft was not reasonably apparent (to a bank in the position of RBS) upon (a reasonable) examination, RBS may nevertheless have acted in breach of duty if it failed to make reasonable inquiry of the issuing branch. Put another way, what reasonable grounds did the bank have for verifying the draft?
Given the amount at stake, you should definitely get legal advice from a solicitor (and get the facts investigated by that solicitor while witnesses at the bank may still be available and employed by your mate's branch) and adopt a firm stance if he gives it the thumbs up.
Somone i know i work had this scam pulled on them. It was a 30k Mercedes and the chap was foreign and turned up with a bankers draft and all the ID etc. Apparently the scam works buy them opening 2-3 bank accounts and raising the draft on this account and paying it into the next account they open. They then purchase a car and the bankers draft gets declined 2 weeks later after the bank realises the fraud. He lost 30k-never saw the car or buyer again and the police were next to useless. All they advised was that the next time you sell a car tell the buyer you are taking a photo of them which should put any scammers off and always get the money TT'd to your account as there are loads of fake bankers drafts floating about and they are also easliy open to fraud as seen here. Last time i sold a car i asked the bank about bankers drafts and most of the bankers i asked did not have a clue about what protection a bankers draft offers over a normal cheque/cash or TT'd money.
This fraud happened to a friend of mine too but he did managed to get his money back. Basically he put a lot of pressure on his insurance company, although initially they said they were not liable as he handed over the keys/log book etc, they did end up paying out, it was about 9 months ago now so if you want I find out exactly what he said to his insurance company on Monday?
Cheers,
After Eight
Cheers,
After Eight
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