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New scam targets bank clients

29 October 2004 - The Mercury

The Ombudsman for Banking Services (OBS) has warned consumers to guard against a fraudulent cash deposit scam that is on the increase and has cost unsuspecting bank customers hundreds of thousands of Rands.

The Ombudsman for Banking Services (OBS) has warned consumers to guard against a fraudulent cash deposit scam that is on the increase and has cost
unsuspecting bank customers hundreds of thousands of Rands.

Bruce Manuel, community marketing officer for the OBS reported that the scam had cost bank clients approximately R300 000 this year.
He said the ombudsman had received numerous complaints from people who had sold goods to a buyer only to discover that a supposed cash deposit into
the bank account was, in fact, a stolen cheque deposit, later reversed by the bank.

Manuel said he had received 16 new complaints this year up from 11 cases in 2003. However, he estimated the total number of cases to be much higher.
"Although the numbers do not appear large, very few of the actual cases are reported to us. Some of them are resolved by the bank but most are only
reported to the police. Based on what we have seen and heard there are many instances of this scam that have occurred," Manuel said.

Manager of investigations for the OBS, advocate John Simpson said in a statement that scam was perpetrated in several ways.
"One way is when the seller advertises goods for sale, the thief establishes contact and offers to purchase. The thief offers to deposit the
selling price in cash into the seller's account and promises to fax the
deposit slip as proof of payment."
"The thief actually 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 faxes it to the seller," Simpson said.
The seller thinks the deposit has been made in cash and hands over the goods.
It is only when the bank reverses the credit that the victim realises he has been conned.

Another scheme, was to deposit a stolen cheque for a larger amount than the selling price. The "buyer" then asked the victim to transfer the balance back to him. The victim obliges only realising later the transaction was fraudulent.

Simpson advised consumers never to accept a deposit slip as proof of payment but to always obtain written verification from the bank before handing over goods or transferring money back to buyers.
He said consumers should ensure cheques deposited were legitimate and use the banks special clearance service.
"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.
Be aware that under certain circumstances, a cheque can be returned even after the funds have been released to the payee."
"Be wary of purchasers offering to pay the purchase price without having seen the goods or of purchasers who send their drivers to pick up the goods," Simpson warned.

Manuel added that some of the banks had amended account statements to immediately reflect whether a cash or cheque had been deposited, which had
helped to reduce the number of cases among their clients.