# Guy buying my car paying by Draft



## wjc (22 Feb 2008)

Had guy come to look at my car yesterday. Interested in buying it and said he would pay by draft (22.5k). Any way I can check if draft genuine when he comes to pay for car? Not paranoid but there was something about him that rang a few alarm bells. Is draft the safest way to be paid? Any advice. Just afraid of being stung.


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## zag (22 Feb 2008)

Arrange to meet him at a branch of his bank and get him to draw the draft there and then.

That way you know it's good.

z


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## mathepac (22 Feb 2008)

Be very, very careful.

I had an incident some years ago when trying to collect a debt. I was issued with a draft in debtor's bank branch. which I duly lodged. Some weeks later, the lodgment was debited against my account. It transpired that lodgments made to the debtor's account were dis-honoured, and the value of the draft would have taken the account into an unauthorised overdraft, so the issuing bank, with the cooperation of my bankers at the time, took the money back. The whole setup was engineered to perpetrate fraud with a daisy-chain of accounts issuing cheques to the next account in the chain, but no funds to back anything up.

So not alone did I not get the money, but as the (temporary, innocent) recipient of the proceeds of fraud, I wound up as part of a Garda investigation.

I strongly suggest that if you have any doubts, walk away.


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## apple (22 Feb 2008)

I've heard stories of people paying for a car by draft and the draft been a fake.

I would not let any car out of my sight until the draft had cleared. If he is a geniune buyer he wont mind waiting for the draft to clear, but if you have doubts as one of the posters above said walk away.


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## mercman (22 Feb 2008)

Mathepac. I am surprised by your post. I always believed that a Bank Draft  was the same as cash . In fact I had an instance where I required to have a Draft stopped  and it could not be done.  I would have thought that the Bank were wrong to do what they did to you.  You had nothing to do  or were involved with the fraud.  Not sure if you got legal opinion, but I would be surprised if their view would be any different to mine.  Very Interesting  !!!
Saying that I had a case whence i was selling something, and it was paid by Draft from a book of Drafts which were stolen and the Bank were legally obliged to pay me.


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## mathepac (23 Feb 2008)

mercman said:


> Mathepac. I am surprised by your post. I always believed that a Bank Draft  was the same as cash ...


My post above is just the bare bones of a long and complicated story which involved a series of legal actions and criminal prosecutions.

The "fraud" is the critical piece as once this was detected the house of cards collapsed, with me (my company) at the bottom of the heap, so to speak.

I don't want to get any more specific for fairly obvious reasons, I'm just sounding a note of caution as OP didn't seem too comfortable about the potential sale.

Sometimes we need to go with the instinct we have even if the logic points us in a different direction and with 22.5k at risk, personally, feeling as OP does, I'd err on the side of caution.

I'm not accusing anyone here of anything and I'm not suggesting anything untoward about OP's prospective purchaser, just putting my experience and opinion in public (for whatever they're worth).


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## anyone (23 Feb 2008)

Why not get him to do a bank transfer into your account instead?


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## Complainer (23 Feb 2008)

apple said:


> If he is a geniune buyer he wont mind waiting for the draft to clear, but if you have doubts as one of the posters above said walk away.


As a genuine buyer, I would hugely mind handing over my draft and being told I have  to wait days to get the car and signed transfer of ownership. 

Waiting for draft to clear exposes the buyer to rip-off.


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## SidTheDweeb (23 Feb 2008)

Complainer said:


> As a genuine buyer, I would hugely mind handing over my draft and being told I have  to wait days to get the car and signed transfer of ownership.
> 
> Waiting for draft to clear exposes the buyer to rip-off.



money transfer into your account is best bet, meet at the bank, do it there and then

Personal opinion, smaller transactions I wouldn't have problem with draft if I had a good feeling about the person. Naive no doubt


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## caoireann (23 Feb 2008)

Bank drafts are the most easily forged documents..I  have that from a reliable source..don't sign over the vehicle ownership till the draft clears..Maybe get a third person to witness the transaction etc..Draw up some kind of bill of sale and give him a photocopy..Get i.d. proof of address as well..If you fundamentally don't trust the person walk away


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## Brendan Burgess (23 Feb 2008)

Mathepac



> I was issued with a draft in debtor's bank branch.



A bank draft is a cheque written by a bank. 

If the draft is forged, obviously it is not the bank's fault.

If you go in with me to my branch of AIB at 52 Upper Baggot Street, and they issue you with a draft for €10,000 drawn on that branch, then they cannot renege on it. It is effectively the same as if I withdrew €10k cash. The bank maybe should not have given it to me, but they can't go after the person to whom I gave the cash. 

So Mathepac, are you absolutely sure?  Did you take legal advice at the time? The bank had no right to stop the draft even if you were in collusion with the debtor. They might have a right to sue the debtor or to sue you, but they cannot stop a validly issue draft.

Brendan


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## RS2K (24 Feb 2008)

Ring the issuing bank to confirm any drafts authenticity. It's very simple.

A draft, once properly issued, cannot be "stopped".


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## Gulliver (26 Feb 2008)

mathepac said:


> I had an incident some years ago when trying to collect a debt. I was issued with a draft in debtor's bank branch. which I duly lodged. Some weeks later, the lodgment was debited against my account. It transpired that lodgments made to the debtor's account were dis-honoured, and the value of the draft would have taken the account into an unauthorised overdraft, so the issuing bank, with the cooperation of my bankers at the time, took the money back. The whole setup was engineered to perpetrate fraud with a daisy-chain of accounts issuing cheques to the next account in the chain, but no funds to back anything up.


 
There are many aspects of the above which are "strange".  Firstly, the draft should not be dishonoured for the reasons outlined above.  Secondly, there is no circumstance in which an Irish draft should be dishonoured "some weeks later"

On the original question of whether one should accept a draft from a stranger - I would recommend that you should arrange that the buyer should pay funds into your account by giro/credit transfer from his own bank account.


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## Gulliver (26 Feb 2008)

mercman said:


> Mathepac. I am surprised by your post. I always believed that a Bank Draft was the same as cash .


 
This thing about a bank draft being the same as cash has its origins in distant history, but is no longer true.  In days of old, when currency was issued by commercial banks, then the banknotes were actually drafts payable to "bearer".

Nowadays a draft is simply a cheque drawn by a bank on its own account.  So it is a cheque in which the drawer is undoubtedly creditworthy, but has all of the other characteristics of a cheque.  If it is stolen or forged, then the relevant legislation which applies to cheques applies also to drafts.


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## mathepac (26 Feb 2008)

Brendan said:


> ...
> So Mathepac, are you absolutely sure?  Did you take legal advice at the time? The bank had no right to stop the draft even if you were in collusion with the debtor. They might have a right to sue the debtor or to sue you, but they cannot stop a validly issue draft...



Brendan, I don't want to hijack OP's car sale thread, but yes I am absolutely crystal clear about what happened and yes legal advice was taken and legal action ensued, as I have already said in my post above.

I still have copies of every single piece of paper generated by the incident (one of the reasons for flooring out the attic in my house!). The worst thing was that it precipitated a chain of events eventually leading to the demise of a very succesful little company which the principals had worked very hard to establish.

Ironically, I didn't want to do business with the party in question as I didn't trust him, but I was over-ruled by my partners.  Having done all the usual background credit checks etc., they saw what they believed was a good business opportunity. Thats how it looked at the start with small invoices being paid promptly, and initially I was glad to be proven wrong, as this individual gave us other good leads.

The "other good leads" turned out to be companies associated with the individual in question and fairly soon the problems began to surface; invoices going past due, phone calls not returned, cheques bounced, the usual signs that all was not well. One of the partners and myself eventually met with our friend in a hotel and went with him to get the draft which was paid for by withdrawals from a number of accounts, not all of which were in the branch in question, but it all seemed kosher as the draft was duly signed and issued, payable to our company.

We made the lodgment, and thus started a three year long nightmare of investigations, legal proceedings and internal recrimination. We did eventually get paid, and the funds the draft represented were part of what we used to pay the liquidator's fee.

So Brendan, there is no part of this story I am not crystal clear about. It is an episode I am unlikely to forget, the lesson being, for the benefit of OP, if your gut says something isn't right, the chances are that something isn't right.


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## mathepac (26 Feb 2008)

Gulliver said:


> ...Nowadays a draft is simply a cheque drawn by a bank on its own account.  So it is a cheque in which the drawer is undoubtedly creditworthy, but has all of the other characteristics of a cheque.  If it is stolen or forged, then the relevant legislation which applies to cheques applies also to drafts.


I agree with the above and would add that if the draft is obtained by fraudulent means, as was proven in the case I mentioned above, then it is the same as a cheque obtained by fraudulent means, less than worthless.


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## amgd28 (26 Feb 2008)

mathepac said:


> if your gut says something isn't right, the chances are that something isn't right.



You will find it hard to get a better piece of advice than this. After a couple of bad experiences of overruling my gut with "logic", I now have learned to go with the gut. Granted you may miss out on the odd opportunity, but at least you will be able to sleep at night


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## csirl (26 Feb 2008)

I suppose it depends on whether the draft is genuine and who it is made out to.

I have used drafts from time to time to pay for things in the past - usually where amount of cash is too large to carry around. Genuine drafts are not drawn on a personal account. Any drafts I've got, I have gone into the bank and paid for them by cash and the draft has been specifically made out to the person/company I am paying in the specific amount I've paid.

If you are offered a draft, simply ring the bank branch that issued it and ask them to verify the details. I would not take a draft that has not been made out to me for the specific amount (by the bank staff in advance, not the purchaser filling in the details himself) I requested or isnt made payable to my name (I dont think it is possible to get a draft made "to cash" - defeats the purpose). A genuine draft is better than a genuine cheque as a draft cannot bounce as it has been paid for in advance. The question is to whether or not the draft is genuine.

One thing that strikes me is that this guy is offering you a draft in advance. He cannot already have the draft as you have not yet agreed to sell him the car. Now, if he is genuine and his concern is about the security of carrying 22k plus in cash over to your place (which may be a genuine concern), then simply offer to meet him at the bank which he intended to get the draft from and take the cash from him instead of him purchasing the draft. He should not have a problem with this as it solves any security concerns he may have and he'll have the cash either in cash or will be able to withdraw (otherwise he wouldnt be able to purchase the draft). Can all be done on the banks premises.


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## Guest117 (26 Feb 2008)

Originally Posted by *mathepac* 

_if your gut says something isn't right, the chances are that something isn't right._

Listen to this advice - I can't remember if it was Joe Duffy show or AN other but there was some publicity about all this stuff re forged drafts etc.

Don't do it - too much money

Cash or bamnk transfer and get your bank manager to confirm the transfer is koshir


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## Brendan Burgess (27 Feb 2008)

> if the draft is obtained by fraudulent means, as was proven in the case I mentioned above, then it is the same as a cheque obtained by fraudulent means, less than worthless.



That simply is not my understanding of it. You went into a bank with someone who owed you money. They defrauded the bank. If the bank had given him cash instead of a bank draft, then the bank would have no recourse to you.

Can we be clear about the result of the legal action. Were the bank forced to honour the draft? 

If you were party to the fraud, I could see why the bank might try to dishonour the draft. But that does not seem to be the case here, although the bank may have suspected you.



Brendan


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## mathepac (27 Feb 2008)

Brendan said:


> That simply is not my understanding of it. You went into a bank with someone who owed you money. They defrauded the bank. If the bank had given him cash instead of a bank draft, then the bank would have no recourse to you.
> 
> Can we be clear about the result of the legal action. Were the bank forced to honour the draft?
> 
> ...


Apparently, the modus operandi which we unwittingly fell victim to, was for the fraudsters to look for drafts as a means of settling urgent "business debts", drawing from apparently cleared funds. In this case we were deemed guilty by association until we were able to prove differently and eventually collect our money.


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## Gulliver (27 Feb 2008)

mathepac said:


> Apparently, the modus operandi which we unwittingly fell victim to, was for the fraudsters to look for drafts as a means of settling urgent "business debts", drawing from apparently cleared funds. In this case we were deemed guilty by association until we were able to prove differently and eventually collect our money.


 
As a former bank manager and developer of  I think that I can answer this one.  Brendan's approach is correct.  A draft which is issued by a bank must be honoured by that bank, regardless of the type of funds used to purchase that draft.  The only possible exception to this would arise if the payee of the draft was complicit in a fraud concerning that draft.  

I am unclear about the legal action involved.  Was it a criminal conviction for fraud or attempted fraud?  Have you made any attempts to enforce payment of the draft by the bank?


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