Public warned against deposit fraud

1 October 2004 - The Star

The Ombudsman for Banking Services has warned the public to be careful of fraud involving false or stolen cheques.

John Simpson, manager of investigation for OBS, said yesterday his office had received complaints from people who sell goods to a buyer only to discover that the supposed deposit into their bank accounts was made with a fraudulent or stolen cheque.

He said the scam could be perpetrated in several ways.

One is that the seller advertises his goods and the thief establishes contact and offers to buy. He then offers to deposit the selling price in cash into the seller's bank account and promises to fax the deposit slip as proof of payment.

The thief then deposits a stolen or forged cheque into the seller's account. A deposit slip is forged to reflect that the deposit was made in cash and the slip is faxed to the seller. Only after the seller has handed the goods to the buyer does he realise that the deposit was not made in cash.

The thief can also deposit a stolen cheque for a larger amount and ask the seller to transfer the balance back to him.

Simpson said a deposit slip should never be accepted as proof of payment: written verification should always be obtained from the bank.

"The banks are urged to continue assisting customers in preventing then from being defrauded in this manner." - Sapa