Cheques and drafts
The golden rules of accepting more traditional payments
Think that cards, cash and electronic payments are the richest pickings for fraudsters? Cheques and drafts are just as prone to fraud as ever.
And always bear in mind that your business will not receive payment for a forged, altered or counterfeit cheque or bank draft.
When your business takes a cheque as payment, you should never release the goods until you’re absolutely sure the cheque is genuine, and won’t be returned unpaid.
Cheques drawn under the cheque guarantee scheme give you some protection. And cheques which are not covered by it should always be treated with caution or until you’re certain they cannot be returned unpaid.
To find out more about the cheque guarantee card scheme, visit the APACS website
Just like cheques, drafts go through the normal clearing process. So if your business is offered a bank draft as payment, never release goods until you know for certain that the draft is genuine and has been paid.
Nobody likes to lose a sale – but it’s always better than losing the goods.
What to look for
- Large orders or new customers – especially ones that don’t fit the normal pattern of your sales.
- Easy sales – is customer too good to be true? For example, are they not even interested in the price or details about the goods?
- Indiscriminate purchases – does it almost look as if the customer doesn’t really care what they buy? If the goods could easily be sold on, you should be even more suspicious.
- Pushy customers – be wary if a customer wants to take the goods right away, and presents you with a cheque or bank draft made out in your company’s name for the full asking price.
- Customers that rush you – don’t be pressurised into releasing goods without carrying out your normal, essential checks.
- Next-day delivery – especially when the customer isn’t worried about additional costs. Be even more wary if the customer’s address is close to your premises.
- Calls on delivery day – and want to know when the goods will be delivered.
- Mobile numbers – you should always get (and check) a landline.
- Overpayments – fraudsters will give you a cheque or bank draft for a value well above the asking price. They’ll then ask you to return the overpayment in cash – using CHAPS or other means. It’s a scam.
Secure alternatives – explore the options
Make life more difficult for fraudsters. Electronic payments – like CHAPS, BACS and Faster Payments – come with built-in security and fraud prevention controls that you won’t find on drafts and cheques.