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Fraudulent Draw Down

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Wed, 02/01/2012 - 06:02
pdvsa
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Hello, would it be easy to draw down fraudulently?  I mean an outside person, someone that had knowledge of the data under the LC.  I would like to hear what others have to say about this and how it could be prevented.  Personally, I dont think it is easy to do this.  The issuer would receive a notification most likely.   

 

thank you

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Wed, 02/01/2012 - 06:20
#1
phill doran
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Joined: 02/10/2009
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don't do it!

Hello pdvsa

I would think that a fraudulent presentation by the beneficiary is always possible – whereas a fraudulent presentation by ‘an outsider’ is far more difficult as the proceeds would be routed to the beneficiary’s account as per the credit.

I imagine that any change to that component of the credit would require an amendment and draw attention to the corrupt presentation.

Just some thoughts…

Cheers

phill

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Wed, 02/01/2012 - 07:15
#2
pdvsa
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Joined: 04/26/2010
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Fradulent Draw

Yes, I do agree that it is more difficult for an outsider to draw.  Some in my organization believe it is easy to do this and I think they are misinformed. 

Doesnt the bank notify the issuer in case of a draw?  I know of a prior notification rule but it is not alwasy the case from what I know.  If there is no notification and if there was an amendment to banking details then do you think it is possible under this type of scenario? 

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