Banks warn of counterfeit bank drafts

BANK OF IRELAND warned customers to watch out for fake bank drafts yesterday after it revealed the incidence of high-quality counterfeit drafts had quadrupled in recent months.

The bank said individuals and businesses stood to lose millions of euro by parting with goods in return for drafts that would be worthless when presented for lodgement.

Bank of Ireland fraud prevention manager Gerry Gibson said no-one should release goods paid for by bank draft unless they were sure that the draft was authentic. Bank customers have presented 420 fake drafts worth a total of €5.4 million over the last three months, which was a sharp increase on the 197 counterfeit items presented in the 12 months to March.

Mr Gibson said the drafts were of good quality and were capable of fooling customers unused to handling them. The drafts had been used by fraudsters who had responded to classified advertisements in newspapers or on websites. There was often no way to trace the fraudster after the fake had been discovered.

Mr Gibson urged customers to exercise common sense and stick to good business practice when handling drafts. "It's prudent not to release high-value goods against uncleared bank drafts," he said. He cited examples of businesses that had been stung for up to €30,000 by allowing goods to be shipped to a buyer only to discover that the draft used to pay for them was worthless.

The warning will challenge a widely-held view among bank customers that bank drafts can be considered as secure as cash. Banks are legally obliged to pay out on a bank draft only if the draft was bought legitimately and signed by bank staff in accordance with internal procedures.

Bank of Ireland said it had taken the step of putting warning notices in its branches to warn customers about the increasing incidence of fake drafts.

Customers are at risk of losing thousands of euro if, for example, they sell a car to an unknown buyer through an advertisement and receive a fake draft in return. There is no mechanism for banks to refund customers in such cases. The onus is on sellers to satisfy themselves that they will be paid.

Mr Gibson warned customers to be on the lookout for unknown buyers who use drafts for amounts in excess of an agreed price and ask for a refund of the difference.

AIB also said it had noticed an increase in the use of fake bank drafts and called for vigilance.