Fraudulent transaction

Shahed · Post by **Shahed** » Tue Oct 04, 2016 1:00 am

A technical question.

May I know what is your practice, if there is any fradulent transaction(s) came to your attention.

Do you send out Swift Broadcast messages each time you see a fraudulent instrument (LC, Bankers Draft, Promissory Note, etc) whether such instrument was the result of an internal fraud/mistake or not (for example a third party presents a copy showing your bank as issuing bank)?

The fundamental question is – whose responsibility is to ensure that an LC is authenticated as a valid instrument. The advising bank certainly has an obligation to this extent and if they fail to do so before advising the LC to beneficiary, I think they are liable. However, if an LC is directly issued (or appear to be issued) to a beneficiary, then the beneficiary should exercise such caution.

May I have input on this matter.

Regards,

Shahed
Toronto
[edited 10/4/2016 7:01:10 PM]
[edited 10/4/2016 7:46:12 PM]

VO9ILLSLOWINSKI · Post by **VO9ILLSLOWINSKI** » Mon Nov 07, 2016 12:00 am

These type of fraudulent instruments have been around for many years. The best actions are to identify who might be the fraudster and who might be the victim and take appropriate steps to protect the victim, the LC Product and the industry per your internal suspicious activity procedure. A broadcast SWIFT provides no value in such a matter.

RSRANGAN · Post by **RSRANGAN** » Thu Nov 10, 2016 12:00 am

Practices vary amongst countries. In UAE we raise a Suspicious Transaction Report (STR) with the Central Bank.