According to the police the fraud revolves around goods
advertised for sale in any type of media – the internet, a
newspaper or even in the local supermarket.
The fraudster purchases the item with a cheque or banker's draft
for substantially more than the agreed price. He then suggests that
the victim cash the cheque and refund the difference by money
transfer once the cheque has cleared and the funds are in the
account.
However, under the clearing system used by the banks, while
cheques may appear to clear within a matter of days, the banks are
entitled to reclaim the value of the cheque if it later turns out
to be stolen or issued fraudulently, often weeks later. This means
that the victim is then out of pocket to the tune of the refund and
the item he thought he was selling.
The Met gave the example of a man who advertised his wife's
Mercedes in a trade magazine and was contacted by a buyer who
claimed to be in Spain. The seller was asked to accept a banker's
draft for £14,300. This was £4,300 more than the asking price. The
draft came from a third party based in the UK, with a request to
send the balance by money transfer to a shipping agent once the
funds had cleared his account.
On average, losses are between £3,000 and £5,000.
"The advice to anyone who is selling something is do not accept
a cheque or banker's draft for any amount over your asking price,"
said DCI Stuart Dark, from the Met's Economic and Specialist Crime
Unit. "You should also be suspicious if the buyer appears reluctant
to meet up to view an item for sale where this would normally be
the usual procedure (i.e. a car, scooter)."
"If you have already been overpaid for an
item, do not transfer any cash from your own account to anyone
connected with the deal by money transfer – even if their funds
appear 'cleared'. Also, don't be afraid to ask questions of your
customer, don't be afraid to work at your own pace (fraudsters
often hurry you into making a mistake), and don't be afraid to seek
advice or to terminate a sale."
The Federation of Small Businesses recently complained about the
clearing system and the fact that payments by cheque can be taken
back from a bank account months after a bank has cleared a cheque
and credited an account.
In a statement issued last month, the FSB said: "The banking
industry has even admitted that cheques are not a safe way of
transferring funds and is urging businesses to consider
alternatives."
FSB National Chairman Carol Undy added:
"Banks are saying that they can never guarantee that they will
not withdraw a cheque and that it can always be cancelled later.
This places businesses in an impossible situation. Banks are in the
business of risk but it appears they are determined to shift this
risk onto businesses by the back door.
"If this really is the death of the cheque then the banks should
be up front about it rather than employing such clandestine
methods. What has been revealed so far is just the tip of the
iceberg, and it is an issue of such importance that we are not
prepared to let it drop."
