WINDHOEK, 1 NOV – Standard Bank prides itself as being more than a bank. Being more than a bank means caring for its customers and for society in general, going the extra mile to ensure that they not only get the best service but are also made aware of the dangers that are lurking out there and which may cost them money.
“In our effort to protect customers from being scammed and defrauded, we have discovered yet another fraudulent scheme that is on the increase and we feel duty bound yet again to warn our esteemed clients to be extra cautious and not to fall prey to the scheme. In the latest criminal scheme, fraudsters use fictitious bank guarantees and bank confirmation letters to misrepresent and defraud unsuspecting individuals and companies, according to a statement relased by the bank.
A guarantee is a bank undertaking in favour of a third party (the beneficiary) at the request of the bank client (the applicant). The beneficiary can use the guarantee to enforce the payment instrument against non-performance by the applicant, or to facilitate agreed payment terms.
For example, in the case of an infrastructure project, if a contractor does not deliver on time, the authorities who commissioned the project can invoke the guarantee issued by the bank in their favour.
Typically, large infrastructure and financial projects, require the vendor to provide a guarantee that would safeguard the successful completion and outcome of the project within the agreed quality parameters and timelines. During the tender stage itself, prospective vendors are requested to provide proof of such an undertaking, as minimum qualification criteria.
It has been noted that in some instances companies receive fake or fictitious bank guarantee documents, that appear to be genuine, but when they are invoked on non-performance or other events, their true nature is revealed.
It is thus advised that companies confirm any bank guarantee received, with the relevant banking institution, in order to identify any fictitious documents, before relying on the same.
BANK CONFIRMATION LETTER
A bank confirmation letter is a letter from a bank confirming the existence and particulars of an account per their record. It is often issued on the request of the account holder for the benefit of a third party, in order to facilitate financial transactions. For example, an employee provides a bank confirmation letter to his/her employer in order for salary to be credited to the account.
It has been noted that certain individuals / companies have received and relied on fraudulent letters manufactured by fraudsters, leading to financial losses, as the payments meant for a genuine vendor, have been paid into a fraudster’s account. These letters also bear a bank stamp that appears genuine, but is often copied from another bank letter that the fraudster has obtained.
Fraudsters insert themselves within the communication between a company / individual and the vendor (usually by hacking into the emails or by using an email address similar to the genuine vendor email address). They pose as the vendor and provide a fictitious bank confirmation letter, indicating that the vendor’s bank details have changed. The company / individual then, relying on this letter, makes future payments meant for the vendor, into to the fraudster’s account.
It is advised that individuals / companies confirm this letter with a known contact at the vendor (telephonically or physically) and with the relevant banking institution, in order to identify any fictitious documents, before relying on this letter.
The rising number of incidents involving these fictitious documents is concerning, as it only means more and more people are losing large amounts of money to fraudsters and that potentially means that some businesses are forced to close down and lay of their staff. We are thus advising our businesses and individuals to be extra cautious when presented with such documents.
The consequence of accepting these fictitious documents is that these clients lose a lot of money or goods worth a lot of money to these fraudsters. And because the documents are fraudulent, the bank would not have been aware of them and would thus also not expect to be held accountable for loss of money or goods.
Standard Bank warns that the only way victims of such fraud can get their money or goods back is by opening a criminal case with the police. In that instance, the bank can only provide a supporting affidavit confirming that it is not the originator of the letter.
“The best remedy would always be for the client or company to contact the bank and ask for confirmation directly, rather than rely on a document with a stamp as even that is sometimes forged, especially on bank account confirmation letters. Companies must be extremely careful when they receive a letter or request indicating that a vendor has changed their account, this has been the easiest way for fraudsters to receive funds meant for the vendor,” Standard Bank warns.
Standard Bank also encourages individuals and businesses to report fraudulent and suspicious to the police or call the Standard Bank Customer Contact Centre (toll free: 92880) for advice on how to handle these matters. – NDN Staffer