Cheque fraud rearing its ugly head again

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Staff Reporter

Windhoek-Cheque fraud remains one of the oldest forms of fraud and one of the biggest challenges facing businesses, individuals and customers alike. Although e-commerce has brought other forms of payment such as cell phone and internet banking, cheques are still considered a convenient form of payment in place of cash, by individuals and businesses.

“However, cheque fraud is still real and we encourage our customers to take advantage of recent technology by using payment methods such as electronic transfers, online banking and cards payments to mention but a few,” said Standard Bank spokesperson Surihe Gaomas-Guchu.

According to the Bank of Namibia, regulations the phasing out of cheques will still take place in the near future.

Gaomas-Guchu said that as of late there have been several incidents regarding fraudulent cheques issued to suppliers or deposited into a supplier’s bank account as cash in return for tangible goods.

“Generally, cheque fraud looks like a legitimate business transaction.
The perpetrator will approach the targeted business entity with an urgent order for goods or services and a promise for immediate payment. The promise is often supported by proof of cash deposit. However, the payment is made with a bogus or fraudulent cheque.

This cheque is not honoured by the bank and leaves the business or customer out of pocket. Anyone who receives payment must verify that the payment was made in cash and if it is a cheque payment wait until the cheque clears before releasing the goods,” explains Gaomas-Guchu.

Cheque fraud can come in many forms ranging from counterfeit cheques, where such counterfeits are printed on non-bank paper to look exactly like genuine cheques and are drawn by fraudsters on genuine accounts held by the bank.

There is also fraud involving forged and/or altered cheques. Forged cheques are involved in instances where genuine cheques are stolen from innocent customers and used by fraudsters. In this case, signatures and amounts are mostly the details which are altered/changed.

Altered cheques are involved in instances where cheques which have been made out by the payer, but fraudsters alter such cheques in some way before they are paid, by for instance altering the beneficiary name or amount of the cheque.

At times, fraud by cheques is committed where genuine cheques are issued by legitimate account holders while bank accounts from which such cheques are issued do not have funds by which such cheques can be honoured. These cheques are called “Refer to Drawer” cheques and are always rendered unpaid.

Overpayment is also classified as a fraud scam which happens when a customer advertises an item for sale in a newspaper or internet. The fraudster responds and sends or deposits a cheque for more than the item advertised. They then ask the difference to be sent back, normally by money transfer like cellphone wallets. The cheque subsequently bounces and the customer suffers the loss.

“In order to avoid financial losses associated with cheque fraud, we urge customers to always be vigilant about fraudulent cheque deposits,” Gaomas-Guchu said.

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