Internet Frauds and Scams - Part V Safety Measures against Fake Letter of Credit

Continuing last week's article, here are few tips on how to protect yourself against fake letter of credit and a real life story.

Tips on how to avoid Letter of Credit Fraud

  • If an "opportunity" appears too good to be true, it probably is

  • Independently verify the terms of any investment that you intend to make, including the parties involved and the nature of the investment

  • Thoroughly investigate the issuing bank, specially if you never have heard of it before

  • Consult your bank, ECGC or appropriate organization

  • Ask for confirmation by a prime world bank

  • Do not invest or attempt to "purchase" a "Letter of Credit." Such investments simply do not exist

  • Do not invest in anything unless you understand the deal. Con artists rely on complex transactions and faulty logic to "explain" fraudulent investment schemes

  • Always be wary of any investment that promises extremely high yields

  • Conmen use secrecy as cover - look out for tell-tale signs

Real Life Story...

2 held for cheating exporters

New Delhi: The police have arrested two persons for allegedly cheating exporters by using fraudulent means and forged documents. The accused have been identified as Khanna (55), proprietor of XXX, and Singh (51) of ZZZ (** you can see the real names of persons and companies in the news clippings, please see below for details - Editor).

The police also claimed to have recovered several incriminating documents during a raid at the accused's office on July 13.

According to the police, Khanna was appointed as a consultant by ZZZ which was representing a London based firm.

Khanna signed three MoUs with Tarsem Goel of Sawan Overseas, Panipat, for export of carpets, bed covers and cotton durries. Goel also reportedly paid an advance commission of Rs 31 lakh.

Police officials allege that Khanna rejected the goods on flimsy grounds. He allegedly fabricated e-mails and forged a cheque for 80,000 Pounds to convince Goel the transaction was genuine.

Source: Times of India, July 22' 2002

(The Newsclipping with actual names of persons and companies involved can be viewed at its source (i.e. The Times of India at or in News Clippings in The Great Indian Bazaar

Related Links:

Source: FAIDA - Newsletter on Business Opportunties from India and Abroad Vol: 3, Issue 42 February 13' 2003

Author : Dr. Amit K. Chatterjee
(Amit worked in blue-chip Indian and MNCs for 15 years in various capacities like Research and Information Analysis, Market Development, MIS, R&D Information Systems etc. before starting his e-commerce venture in 1997. The views expressed in this columns are of his own. He may be reached at )

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