Tempered cheque is one of the fraud related issue. Many a times fraudsters alter the cheques to change the name (in order to benefit someone else) or the amount on the face of cheques, for example simple altering can change $500.00 into $500,000.00. Instead of changing the real cheque, fraudsters forge the depositor’s signature on a blank cheque or print their own cheques drawn on the bank accounts that are owned by someone else. Sometimes the accounts are non-existent also. They would encash the cheque and withdraw the money before the banks realise that it was a fraud cheque. One example is the popular and infamous Vietnam bank scandal.
Uninsured deposits are when a bank accepting public deposits may be uninsured or not licensed to operate at all. The name of this bank may be quite similar to that of legitimate banks so as to confuse the customers. This is done to ask for deposits for these uninsured banks. Some of these banks may also sell stock indicating ownership of the bank.
Altered chequebooks are also one of the most common errors found in banks. Forgers may have access to facilities such tax authorities, post offices, a corporate payroll or a social office, which prepare cheques in huge numbers. The fraudsters then may open bank accounts under any name and deposit the cheques, which may first alter to appear legal, so that they can withdraw unauthorised funds in future as well. They also gain unauthorised access to blank chequebooks, and forge signatures on the cheques.
Cheque kiting is also known as the float. This is a banking system wherein money is temporarily counted twice. For example when a person deposits a cheque to an account at Bank A, the money is made available instantly in that account even though the equivalent amount of money is not immediately removed from the account at Bank B at which the cheque is drawn. Thus both banks momentarily consider the cheque amount as an asset until the cheque formally clears at Bank B. The float serves a legitimate purpose in banking, but when funds at Bank Y are insufficient to cover the amount withdrawn, these results in intentionally exploiting the float from Bank A which is a form of fraud. Property tycoon among them named as Pham Cong Danh who was involved inVietnam Bank scandal at VCB.
Fraudulent loans are one unseen by many people. Banks are always willing to give loans to the customers especially if they knew that the money will be repaid in full with interest. Banks earn handsome interest especially if the loan amount is quite good. This is one of the ways to remove money from a bank in the form of loan. Fraud in case of loan is when a dishonest bank officer controls a business entity, who would borrow the money from the bank in the form of loan or mortgage and as soon as the loan is sanctioned and the funds are made available he would simply declare bankruptcy or vanish with the money.
Fraudulent loan applications are forms to be filled up. Here the individuals provide wrong information to conceal their history such as the loans being unpaid and other financial problems and also overstate the profits in order to make a risky loan appear to be a good investment for the bank. Many a times the documents are forged to hide other thefts. Banks tend to count their money carefully so every penny is accounted for. Thus the documents that claim that a particular amount of money has been borrowed as a loan, or withdrawn by a depositor or invested can be very useful to someone who wants to hide the details that the bank’s money has actually been stolen and is now gone.
Demand draft fraud is in which only an insider can be involved in Demand draft (DD) fraud since they know the coding and punching of a DD. It is undertaken by one or more corrupt bank officers. Here they firstly remove a few DD leaves or DD books from stock which also happens at Vietnam Commercial Bank and write them like a regular DD. Such fraudulent demand drafts are usually drawn payable at a distant city without debiting an account.
Reference Links:-