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Cheque fraud

How to deal with this?

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Client sold £25k of goods. Payment is always taken by client before goods are shipped. Client sees the sales amount appear on their bank statement thinking it was a BACS transfer and shipped goods to customer. They then receive letter from bank saying that it was actually an over-the-counter cheque payment by the customer and the cheque has been stopped.

Client is understandably furious! 

Any tips on how to deal with this? Could the bank be liable? Should they appoint debt recovery solicitors or baliffs to try to recover the goods before the customer sells it all? (if they can find them!)

Client now has a copy of the cheque with the bank details of the person who wrote it - is this a matter that could/should be reported to the police as fraud or is this a commercial dispute that they wouldn't deal with?

 

Thanks in advance!

Replies (9)

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By carynw
08th Feb 2018 11:04

I cant see how the bank would be liable, they didn't tell your customer it was ok to ship the goods or that the payment was BACS did they?

Your client needs to contact the customer and request payment and if that isn't forthcoming then issue proceedings through the courts.

Don't think the police would be interested until he has at least contacted the customer and tried to get his money, being optimistic there may be a genuine reason why the cheque was stopped but I doubt it.

Good luck!

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Replying to carynw:
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By WhichTyler
08th Feb 2018 11:12

Worth reporting to Action Fraud but don't hold your breath waiting for them to turn on the doorstep...

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By Wanderer
08th Feb 2018 11:14

Fairly common fraud & no the bank won't accept liability.

Google 'Cheque overpayment scam' for more details as to how it works.

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By memyself-eye
08th Feb 2018 11:27

what reason did the bank give for not honouring the cheque - it will be written on the cheque. If it says 'refer to drawer' then there is not enough money to pay the cheque. If it says 'payment countermanded by order of drawer' then your client's customer has stopped the cheque- if so your client needs to find out why. Either way the bank has no liability to your client.

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By thomas34
08th Feb 2018 11:29

Sounds as if the customer paid in a cheque to your client's bank account using their sort code and account number without a paying in slip or using the automatic banking machine which would require a debit card unless of course there was a slip attached to the invoice. Might be worthwhile finding out more as to how they paid it in before deciding that the bank did everything correctly.

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Replying to thomas34:
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By Carl London
08th Feb 2018 14:08

Thanks all for comments

thomas34 wrote:

Sounds as if the customer paid in a cheque to your client's bank account using their sort code and account number without a paying in slip or using the automatic banking machine which would require a debit card unless of course there was a slip attached to the invoice. Might be worthwhile finding out more as to how they paid it in before deciding that the bank did everything correctly.

What could we potentially find which would show the bank did not deal with this correctly?

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Replying to Carl London:
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By Accountant A
08th Feb 2018 16:09

Carl London wrote:

What could we potentially find which would show the bank did not deal with this correctly?

It really f***s me off when people try to blame banks for their own stupidity.

Who does £25k worth of business with a new customer without taking the most basic of precautions?

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By Carl London
08th Feb 2018 17:45

If funds showed as cleared and the client had no idea the customer paid by cheque I would not call that 'stupidity'

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Replying to Carl London:
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By Wanderer
08th Feb 2018 18:49

The way cheque fraud works is seller believes the funds have cleared. Then the cheque bounces a week to a month later because it is stolen / falsified etc. Very common if the cheque is drawn on an overseas bank.

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