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Banking Fraud

A dishonest act or behaviour through which one person gains or tries to gain an advantage over another which results in the loss of the victim, directly or indirectly is called as fraud. With the rising banking business, cheats in banks are additionally expanding and the fraudsters are turning out to be increasingly complex and shrewd. Banking Frauds constitute a considerable percentage of white-collar offences being probed by the police. Bank fraud is a federal crime in many countries, defined as planning to obtain property or money from any federally insured financial institution. Different kinds of banking frauds are:-
DEPOSIT ACCOUNT FRAUDS: The various types of frauds that are generally committed while depositing amount in the account are value inflation of cheques deposited, changing the nature of the cheques, operating a dormant account fraudulently and non deposition and misappropriation by agents. In order to hide serious financial problems, some businesses have been known to use fraudulent bookkeeping to overstate sales and income, inflate the worth of the company's assets or state a profit when the company is operating at a loss.
BILL DISCOUNTING FRAUD: These are generally expensive and can take in the forms of discounting on Stolen or Fake Railways Receipts and motor receipts along with other necessary bills, discounting of forged or fake bills with inflated value, drawn on sister concern or discounting of fake or forged bills for valueless goods.
CREDIT CARD FRAUDS: Credit card fraud is widespread as a means of stealing from banks, merchants and clients. A credit card is made of three plastic sheet of polyvinyl chloride. The central sheet of the card is known as the core stock. These cards are of a particular size and many data are embossed over it. But credit cards fraud manifest in a number of way. These are:
• Genuine cards are manipulated and altered.
• Counterfeit cards are created
• Fraudulent telemarketing is done with credit cards.
• Genuine cards are obtained on fraudulent applications in the names/addresses of other persons and used.
LOAN FRAUD: The following types of frauds are generally committed in regard to loans are-
• Two different person taking loan on the same item or product
• People taking loan without a providing actual address and disappearing at the time of repayment
• Loan taken for one purpose but used for a different purpose i.e loan taken for agriculture but used for personal purposes
• Borrowing is denied when the particular person is alleged of non payment
IMPERSONATION AND THEFT OF IDENTITY: Theft of identity has become an increasing problem; the scam operates by obtaining information about a victim, then using the information to apply for identity cards, accounts and credit in that person's name. Often little more than name, parents' name, date and place of birth are sufficient to obtain a birth certificate; each document obtained then is used as identification in order to obtain more identity documents. Government-issued standard identification numbers such as "Social security numbers, PAN numbers" are also valuable to the identity thief.
CHEQUE RELATED FRAUDS: This constitutes the biggest volume of bank frauds. This crime is done in the following forms:
• Cheques are stolen, filled and signed spuriously and encashed.
• The signed cheques are stolen and are encashed with alterations, if needed
• Cheques issued by organisations for employees are duplicated
• Alteration of cheques to increase the amount or change the beneficiary or add an additional beneficiary.
• Cheque Kitting: Cheque Kiting exploits a system in which, when a cheque is deposited to a bank account, the money is made available immediately even though it is not removed from the account on which the cheque is drawn until the cheque actually clears
PHISHING AND INTERNET FRAUD: Phishing operates by sending forged e-mail, impersonating an online bank, auction or payment site; the e-mail directs the user to a forged web site which is designed to look like the login to the legitimate site but which claims that the user must update personal info. The information thus stolen is then used in other frauds, such as theft of identity or online auction fraud.
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