Police warn of ‘cash-back scam’

The documentation circulated by police reads: “The information below was received from a bank based in Northern Ireland and sets out the MO of a variation to a ‘cash-back’ scam.

“This particular fraud type is aimed at businesses prepared to sell and ship goods abroad. The goods can range from vehicles, heavy machinery, electrical appliances; actually anything because in the majority of cases it is not the goods that the fraudsters are after.

“The business will be approached by e-mail or perhaps by phone or possibly both by someone purporting to be interested in making a (usually substantial) purchase. Eventually a price will be agreed and the purchaser will commit to sending an upfront electronic transfer of funds directly to the seller’s bank account, details of which the seller will have been asked to provide.

“However, the fraudster will not make an electronic transfer of funds but instead will post, via courier, a worthless cheque directly to the bank along with a letter impressing urgency that the cheque should be lodged to the account, which the banks refer to as ‘Deposit Acceleration Letters’. The cheques are worthless for a variety of reasons.

“The worthless cheque will be for more money than the agreed purchase price of the goods (perhaps as much as double the amount) and the fraudster will immediately contact the seller and say that, due to an administrative error, they had sent the wrong amount by electronic transfer and will request an immediate refund of the additional amount. The business will be unaware that a cheque was sent, they will be of the understanding that the transaction was by way of electronic transfer.

“The danger is that the seller of the goods may inspect their account or make an enquiry from their bank to find out if a payment has been made into their account. If it has, the seller may not realise that the payment was actually a cheque (which in time will be returned unpaid) and not an electronic transfer, and may make arrangements to immediately send the additional funds back to the fraudster, by way of an International Money Transfer.

“If the seller complies with this request it would eventually leave them at a considerable loss once the cheque is returned unpaid and debited to their account.

“Any cheques that have been lodged have never been cleared; however, recently a customer of a local bank did send funds away (from funds already available in their account) but the bank managed to get the funds back from Dubai for them (luckily).”