Crossing cheque fraud

Article Abstract:

The prevalence of check fraud in recent years and the lack of a straightforward non-transferable check payment system have prompted the passage of the Cheques Act 1992. This law makes the crossing 'A/c payee only' a binding instruction by which banks must abide. Collecting banks are now mandated to issue payments solely to designated payees and check transfers through endorsement are prohibited. It should be noted that this Act provides statutory authority only to the 'A/c payee only' crossing, thereby it cannot apply on the 'not negotiable' and other crossings. Although the enactment of the law will minimize check fraud, companies will be better off if they discard the outdated check payment system and adopt the more secure electronic funds tranfer technology.

Prevention, Checks, Check fraud, Bank fraud

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It's comforting to agree

Article Abstract:

The increasing complexity of banking practices have made certain rights and obligations in contracts unclear. Details are normally left to a documentation stage after transactions have been agreed to. Many omissions in contracts are covered by general law and banking practice, but to avoid disputes over parties' rights and obligations, many firms resort to comfort letters. A comfort letter places a serious obligation on a company to repay a subsidiary's debt unless it is explicitly stated in the comfort letter that such obligation is excluded. Comfort letters should be seen as creating contractural obligations even without explicit guarantees unless the parties state explicitly in the letter that certain provisions are not intended to be binding.

Contracts, Letters of comfort, Comfort letters

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