Demand Draft Fraud: Warning

SS-Traveller · 22nd August 2009, 13:12

A friend and neighbour of mine was unwittingly involved recently in a colossal fraud amounting to over seven lakh rupees.

His cousin contracted to sell some goods (pneumatic valves of some sort) from Maharashtra, to a buyer in Delhi, over the internet.

The cousin asked my friend to close the deal by handing over the goods to the buyer, which were freighted to his (the friend's) address. My friend was to receive the demand draft as payment for the goods, and courier it to his cousin, which he did.

This was a DD issued from a Chandigarh bank, payable at Mumbai, for over Rs.7,13,000. On depositing the draft at his bank, the cousin received a call from the bank to discover that the draft was forged. It appears that the original DD was issued from the same bank against cash, for an amount of Rs.500, payable at Kolkata.

The demand draft was subsequently doctored by some means, the payee and amount details were changed while retaining the original paper and signature, and given to my friend.

The buyer is untraceable. His addresses and phone numbers turned out to be fake, the goods have disappeared. The cops are inclined to believe my friend may have a hand in this! The friend is mortified and doesn't know what to do.

Members please be warned, do not trust demand drafts until they are encashed!

ramie2400 · 22nd August 2009, 13:33

Ohh man thats the worst nightmare scenario with dealing in lakhs in business,but in any business which goes in lakhs they have certain advance amount to ensure the capabilities of a buyer and some paperwork is involved but obvious is the person is unknown.

arin_12 · 22nd August 2009, 14:04

As per my knowledge now a days Banks put some sticker on the DD where the name and amount is written. And if they try to remove the sticker and re type the amount the paper will tear. So is that might be fault of the Bank to if they does not use the sticker.

archat68 · 22nd August 2009, 14:15

Now a days the paper in which a DD is printed has microprinting on it - so that erasing the printed value is impossible. Also, they print the exact amount in one place (such as Rs. 7,00,000) and a slightly incremented value in another place (e.g not over Rs. 7,00,001) and also put a sticker over the printed amount. So, it's got a fair amount of protection against fraud.

In this case it seems that someone from the bank itself is involved - who made a fraud DD with all the normal precautions that we see in a DD. In that case it is impossible to detect a fraud unless it is rejected by bank.

So, play safe and don't trust unknown buyer.

kannan666 · 22nd August 2009, 14:25

Thanks for sharing this Doc, will be doubly careful from now on while accepting demand drafts from unknown contacts !

GTO · 22nd August 2009, 15:37

Quote:

do not trust demand drafts until they are encashed

+1 to that. One of the biggest used car dealers in Mumbai was similarly swindled. Customer gives a DD valued @ 8.xx lakhs and drives away in a nearly new Tata Safari. Upon depositing the draft, the dealer got to know that it was fake. Obviously, neither the buyer nor the Safari have been located.

phamilyman · 22nd August 2009, 16:19

Ohho. Its been around since childhood - am surprised its not stopped by technology!

I've read about it in crime magazines since college times!

janitha · 22nd August 2009, 17:35

But I fail to understand why one one should trust somebody who is known though internet only and not personally, at least for high value deals.

SS-Traveller · 22nd August 2009, 18:15

Quote:

Originally Posted by janitha

But I fail to understand why one one should trust somebody who is known though internet only and not personally, at least for high value deals.

Well, I guess most of us tend to trust a demand draft to be as good as cash. It's come to that point where you can't trust a bunch of currency notes because they might be fake, and now you can't trust a DD because that might be fake too!

janitha · 22nd August 2009, 18:34

Quote:

Originally Posted by SS-Traveller

Well, I guess most of us tend to trust a demand draft to be as good as cash. It's come to that point where you can't trust a bunch of currency notes because they might be fake, and now you can't trust a DD because that might be fake too!

Yes, very true. Recently when I had to receive 10L in connection with a transaction, I had them get the DD from bank in my presence though they were known to me. Actually they wanted me to receive cash which is illegal too. I paid the DD commission.

meerkat · 22nd August 2009, 21:01

Quote:

Originally Posted by archat68

Now a days the paper in which a DD is printed has microprinting on it - so that erasing the printed value is impossible. Also, they print the exact amount in one place (such as Rs. 7,00,000) and a slightly incremented value in another place (e.g not over Rs. 7,00,001) and also put a sticker over the printed amount. So, it's got a fair amount of protection against fraud.

I don't think the above protection measures are followed universally by all
banks. For example, as far as I remember, Citibank DDs are not very different
from regular checks. Of course, there protection measure is also good, with
carbon imprint of the front-side writings on the back.

BaCkSeAtDrIVeR · 22nd August 2009, 21:05

Fake DD? AFAIK, the payee (the guy who gets the DD) can sue the issuing bank for the DD amount.

vnabhi · 22nd August 2009, 21:37

SS, this reminded me of a huge marketing fraud in a PSU steel industry in the mid-90s. I was in the Personnel Department and had access to sensitive information.

This also involves a fake DD at Calcutta for 3 crores INR. The Branch Manager took the DD and released the steel to the party.The biggest mistake he made was not giving the DD to the Finance representative in his branch for encashment for 3 months! Finally when he did it, it was found to be fake!!

Since it was a PSU, CBI got roped in, the guy was suspened, put in jail pending inquiry and also dismissed from service after 3 years. AFAIK, he was in jail when I left that PSU in 2002. An officer of the rank of General Manager was also implicated for not having his team follow procedures to avoid such lapses.

I feel sorry for the victim in your case.

PatienceWins · 23rd August 2009, 01:36

Thanks for letting us know. I thought DD was safe. I will be careful while accepting DD from unknown contacts.

I think the safest option now is online transfter. Get money transferred and then release the goods.

gd1418 · 23rd August 2009, 10:15

With so many Internet frauds happening, people are wary of online transfers...

Quote:

Originally Posted by PatienceWins

Thanks for letting us know. I thought DD was safe. I will be careful while accepting DD from unknown contacts.

I think the safest option now is online transfter. Get money transferred and then release the goods.

22nd August 2009, 13:12	#1
SS-Traveller Distinguished - BHPian Join Date: Jan 2009 Location: New Delhi Posts: 8,162 Thanked: 27,120 Times View My Garage	Demand Draft Fraud: Warning A friend and neighbour of mine was unwittingly involved recently in a colossal fraud amounting to over seven lakh rupees. His cousin contracted to sell some goods (pneumatic valves of some sort) from Maharashtra, to a buyer in Delhi, over the internet. The cousin asked my friend to close the deal by handing over the goods to the buyer, which were freighted to his (the friend's) address. My friend was to receive the demand draft as payment for the goods, and courier it to his cousin, which he did. This was a DD issued from a Chandigarh bank, payable at Mumbai, for over Rs.7,13,000. On depositing the draft at his bank, the cousin received a call from the bank to discover that the draft was forged. It appears that the original DD was issued from the same bank against cash, for an amount of Rs.500, payable at Kolkata. The demand draft was subsequently doctored by some means, the payee and amount details were changed while retaining the original paper and signature, and given to my friend. The buyer is untraceable. His addresses and phone numbers turned out to be fake, the goods have disappeared. The cops are inclined to believe my friend may have a hand in this! The friend is mortified and doesn't know what to do. Members please be warned, do not trust demand drafts until they are encashed!
	() Thanks

22nd August 2009, 13:33	#2
ramie2400 Senior - BHPian Join Date: Nov 2006 Location: Mumbai Posts: 1,903 Thanked: 66 Times View My Garage	Ohh man thats the worst nightmare scenario with dealing in lakhs in business,but in any business which goes in lakhs they have certain advance amount to ensure the capabilities of a buyer and some paperwork is involved but obvious is the person is unknown.
	() Thanks

22nd August 2009, 14:04	#3
arin_12 BHPian Join Date: Jul 2008 Location: Bangalore Posts: 627 Thanked: 84 Times View My Garage	As per my knowledge now a days Banks put some sticker on the DD where the name and amount is written. And if they try to remove the sticker and re type the amount the paper will tear. So is that might be fault of the Bank to if they does not use the sticker.
	() Thanks

22nd August 2009, 14:15	#4
archat68 BHPian Join Date: Dec 2006 Location: Kolkata Posts: 896 Thanked: 617 Times	Now a days the paper in which a DD is printed has microprinting on it - so that erasing the printed value is impossible. Also, they print the exact amount in one place (such as Rs. 7,00,000) and a slightly incremented value in another place (e.g not over Rs. 7,00,001) and also put a sticker over the printed amount. So, it's got a fair amount of protection against fraud. In this case it seems that someone from the bank itself is involved - who made a fraud DD with all the normal precautions that we see in a DD. In that case it is impossible to detect a fraud unless it is rejected by bank. So, play safe and don't trust unknown buyer.
	() Thanks

22nd August 2009, 14:25	#5
kannan666 Senior - BHPian Join Date: Aug 2007 Location: KA-02 Posts: 1,002 Thanked: 128 Times View My Garage	Thanks for sharing this Doc, will be doubly careful from now on while accepting demand drafts from unknown contacts !
	() Thanks

22nd August 2009, 16:19	#7
phamilyman Senior - BHPian Join Date: Jul 2007 Location: Gurgaon Posts: 5,968 Thanked: 4,641 Times	Ohho. Its been around since childhood - am surprised its not stopped by technology! I've read about it in crime magazines since college times!
	() Thanks

22nd August 2009, 17:35	#8
janitha BHPian Join Date: Feb 2009 Location: Kollam, Kerala Posts: 368 Thanked: 2 Times	But I fail to understand why one one should trust somebody who is known though internet only and not personally, at least for high value deals.
	() Thanks

22nd August 2009, 21:05	#12
BaCkSeAtDrIVeR BANNED Join Date: Jun 2007 Location: Kochi Posts: 2,522 Thanked: 752 Times	Fake DD? AFAIK, the payee (the guy who gets the DD) can sue the issuing bank for the DD amount.
	() Thanks

22nd August 2009, 21:37	#13
vnabhi Senior - BHPian Join Date: May 2007 Location: DC -> DC Posts: 5,958 Thanked: 2,393 Times View My Garage	SS, this reminded me of a huge marketing fraud in a PSU steel industry in the mid-90s. I was in the Personnel Department and had access to sensitive information. This also involves a fake DD at Calcutta for 3 crores INR. The Branch Manager took the DD and released the steel to the party.The biggest mistake he made was not giving the DD to the Finance representative in his branch for encashment for 3 months! Finally when he did it, it was found to be fake!! Since it was a PSU, CBI got roped in, the guy was suspened, put in jail pending inquiry and also dismissed from service after 3 years. AFAIK, he was in jail when I left that PSU in 2002. An officer of the rank of General Manager was also implicated for not having his team follow procedures to avoid such lapses. I feel sorry for the victim in your case.
	() Thanks

23rd August 2009, 01:36	#14
PatienceWins Senior - BHPian Join Date: May 2007 Location: Bangalore Posts: 2,416 Thanked: 807 Times View My Garage	Thanks for letting us know. I thought DD was safe. I will be careful while accepting DD from unknown contacts. I think the safest option now is online transfter. Get money transferred and then release the goods.
	() Thanks