I am contemplating accepting a banker's draft for a large sum of money. The draft would be drawn on a UK bank. Is there any possibility whatsoever that such an instrument could be dishonoured if, for example, it were forged or stolen?
What precautions can I take to ensure that I am not likely to lose out if I am unwittingly dealing with a member of the criminal classes?
Yes, if it were stolen or forged it could indeed be returned unpaid.
A bankers draft is essentially a normal cheque, just issued on the bank, rather than the individual. That said, forgery is difficult, and there are extra security measures in place in their issue, which I obviously cannot post here!
If you are in doubt I suggest you take it to the issuing bank (any branch will do) and they will be able to ascertain it's authenticity for you.
As a guide, check that the amount and figures match, that there is no smudging, that the guide numbers have not been tampered with, that there is a crossing sign showing "not more than x", that the signature is written in pen and normally has a reference no underneath (staff no normally) and if it is a large cheque, that there should be two signatures. Unfortunately, different banks will have slightly different procedures so it is difficult to tell!
To make life easier, suggest the buyer pay you by CHAPS or BACS. BACS will take three days, but CHAPS will allow the buyer to pay you the same day, and is irrevocable. For your piece of mind, discounting the goods by the fee (£20 or £23 normally) will probably be worth it.
Hope this helps
MC
Short answer yes it could be dishonoured for the reasons you mention and also I suspect if the funds it was drawn against were dishonoured. Contact the issuing bank (and preferably present it at the issuing branch) and ask them to verify the authenticity, I know several hold details of bankers drafts they issue on their computer system including draft number, amount, payee so the chances are that if the details they hold agree with the details of the draft you hold, it would be fairly unlikely that someone would bother copying a issued banker draft so it had all the same details including I would think.
At the end of the day demand cash if you are that suspicious of it person giving it to you, I know you would then probably get a few questions as to the origins of it and reported to NCIS under money laundering rules.
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