The Ombudsman for Banking Services (OBS) has warned that it is receiving complaints from people who sell goods to buyers only to discover that the supposed deposit into their bank account was made with a fraudulent or stolen cheque.

"We have received a number of complaints on this issue and we would like to warn the public what to look out for," warns John Simpson, manager of the investigations for the OBS.

He said his office hears horrific stories of people who have been conned and have suffered huge losses as a result of the scam.

According to him, the scam could be perpetrated in several ways.

One is that the seller advertises its 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.

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

"The seller, thinking the deposit was in cash, does so, only realising later that the deposit was fraudulent."

Simpson advises that people not accept a deposit slip as proof of payment. "Written verification should always be obtained from the bank before any goods are handed over or money is transferred back to the buyer.

"Where cheques are deposited, ensure they are legitimate. Rather request special clearance on cheques deposits. This way the cheque is sent to the drawer's bank for verification before it is paid. Do not hand over any goods until the cheque is fully paid."