Fraudster Walks Away With Rs 42,500

Location/place: Mumbai

Name of company/service: Dena Bank

When Dena Bank failed to verify forged signatures on a cheque for Rs 42,500 they made the mistake of simply accepting the cheque and making the payment allowing a fraudster to walk away with the amount.

The first thing that would come to mind is, “what’s the big deal about 45k when people and companies loose lacs and corers?” The big deal is that this 42,500 was not lost by one of those big MNC’s or someone with lacs and lacs to spare. This money was lost due to the bank’s failure to enforce security and procedure. Over time people have lost money to fraudsters because of the lack of procedural discipline followed by the banks.
In the case of Dena Bank, Malad East, Mumbai; a man, pretending to sell Reliance Broadband connections for Rs 100 to senior citizens, entered the house of the victim. He even had the residents of the house fill forms and issue him a cheque for Rs. 100. He then proceeded to confound everyone with numerous requests. While everyone was busy with his request, he removed the cheque for Rs 100 from the cheque book. He didn’t stop there; he even pulled out the blank cheque below it. After having gotten the blank cheque the perpetrator made out a self cheque, forged the signatures on it and approached Dena Bank, Malad East, for a withdrawal.
The teller on duty at Dena Bank informed the person that the signatures were not matching. Hearing this, the perpetrator gave an excuse and went out for a few minutes. When he came back he had freshly forged signature on the cheque. When this signature also didn’t match he repeated the exercise. What was remarkable here is that he repeated this exercise up to seven times before the bank finally cleared the cheque and made the payment. The bank employee responsible for the payment did suspect something but made the payment nonetheless. The bank never got wise as to why someone would go in and out of the bank seven times to re-do a signature instead of just getting the account holder in and having them sign the cheque again.
When the bank was informed of the fraud, they carried out an internal investigation that led to the identifying of the teller who was responsible for making the payment on the cheque. They also informed the account holder that they had referred the problem to the local police station. Apart from this Dena Bank informed the account holder that they were willing to submit the cheque to a handwriting expert, who could verify that the signatures had been forged or not, provided the account holder bear the cost of soliciting such service.
The questions this incident raises are that should the bank have really honoured the cheques? Shouldn’t the bank have suspected something when the person kept going out again and again? Sources at Dena Bank claimed that they did call the account holder to confirm with them about the validity of the cheque but failed to receive a reply from them.
Banks have certain security measures in place where in they check your photo id and match the signatures on the cheques to verify that it is genuine. They are also supposed to match the photo id produced, to the photo they have on record. The rules are that if the signatures don’t match the cheque will not be honoured unless the bank can call up the account holder and confirm that they did issue the cheque in question. In this case the procedures were not followed and a mistake was made.
This is not the first time something like this has happened. There is an e-mail, that has been doing the rounds, where someone, the victim had never even met, forged a photo id and got ICICI Bank to change the SMS banking number on the victims account. The fraudster went on to order a new cheque book and managed to withdraw a lot of money from the account via RTGS transfers to an account in Allahabad Bank and producing “self cheques” to withdraw money from the account. In this case the mistake that ICICI Bank made was to not verify the photo on the ID card produced by the perpetrator against the photo of the account holder that was on record with the bank.

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