Sellers beware, OBS cautions

20 July, 2005

Consumers are urged not to take bank account deposits at face value. The Ombudsman for Banking Services (OBS) has noted an increased number of complaints relating to fraudulent cheque deposits. A recent case involved payment for a service quoted at R6000. The 'client' paid R30,000 into the complainant's account, faxing him a deposit slip reflecting a cash deposit. The complainant, thinking that there had been a genuine overpayment, transferred R24,000 into an account of Mr. X, as nominated by the client. The day after, the bank advised that the R30,000 cheque had been returned unpaid.

Fortunately, the bank refunded the complainant a portion of the lost money.
"Not all victims are as lucky," says Ombudsman Advocate Neville Melville. "We advise sellers who advertise services or goods to be on the lookout for con artists, as many sellers have handed over their goods thinking that cash has been paid into their accounts, only to find that it was a stolen or fraudulent cheque that is subsequently rejected by the bank."

Melville advises consumers not to hand over goods on the strength of a deposit slip. Depositors of fraudulent cheques can alter the slip to reflect a cash deposit. In cases such as this, the bank cannot be held liable, unless it is found that a teller did not process the deposit correctly. It musty be borne in mind that ATM or Internet statements do not differentiate between cash and cheque payments .

Cheque payments are often made available immediately - this gives access to the funds before the cheque has been paid by the drawer's bank. Should the cheque not be honoured, the funds will be debited from the account. When phoning the bank to confirm a deposit, it is important to check whether it was cash or cheque, requesting written confirmation, as verbal assurances can be disputed.

Warning bells should sound, adds Melville, if buyers offer to pay without seeing the goods, pay the advertised price without negotiation, or insist that goods are delivered to a specific address or collected by a driver or friend or the amount deposited is more than the purchase price.

To alleviate the risk to customers, certain banks have introduced 'cash only' stamps, machine printed deposit receipts and systems that immediately reflect the nature of the deposit. "The banks have been aware of these types of scam for some time," says Melville. "It is their responsibility to minimise the risk by continually educating clients on safe banking. However, the client needs to be vigilant, as any carelessness on his or her part is taken into account when the OBS is called to make a recommendation on compensation."

The OBS is an impartial body providing banks and their customers with a free, efficient dispute resolution service. During 2004, it opened 2.885 files and made final recommendations in 32 cases. 62% in favour of the complainants and 38% for the banks.

For more information on the OBS and its services, visit www.obssa.co.za or phone Sharecall 0860-800-900.