1 / 7

Letter of Credit Fraud

Letter of Credit Fraud. By: Sage Richards. What is a Letter of Credit?. Letter of Credit- A finical contract between bank, customer, and beneficiary (seller); that involves transfer of goods or services.

Jimmy
Download Presentation

Letter of Credit Fraud

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Letter of Credit Fraud By: Sage Richards

  2. What is a Letter of Credit? • Letter of Credit- A finical contract between bank, customer, and beneficiary (seller); that involves transfer of goods or services. • Purpose- substituting the credit of the bank for that of the customer, for the purpose of facilitating trade. • In the event that the buyer cannot make a payment the bank will cover the outstanding amount. • Example: You want to buy a $50,000 truck from Dodge, which agrees to sell the truck and gives you 60 days to pay it with the condition that you provide them with a 98 days letter of credit for the full amount.

  3. Example Letter of Credit

  4. Elements of a Letter of Credit • Payment undertaking given by a bank • On behalf of a buyer • To pay a seller • On presentation of specified documents representing the supply of goods • Within specified time limits • Documents must conform to terms and conditions set out in the letter of credit • Irrevocable guarantee of payment to a seller.

  5. Process

  6. TheFraud • The scammer attempts to make money with faulty business transactions or tells the victim that the letter of credit is an investment. • Scammers will promise to ship the items in exchange for payment, only to disappear after receiving the money. • Another way is that the scammer will tell the victim that it is an investment, though this type of investment does not exist. • By being well educated about financial frauds you make yourself much less likely to fall victim to them. Being aware is the first step to being safe.

  7. Bibliography • "Figure 13 - Irrevocable Letter of Credit." Figure 13 - Irrevocable Letter of Credit. N.p., n.d. Web. 26 Oct. 2015. • "Fraud Safety." FBI. FBI, 17 Mar. 2010. Web. 26 Oct. 2015. • "Letter Of Credit Definition | Investopedia." Investopedia. N.p., 23 Nov. 2003. Web. 26 Oct. 2015. • The Life Cycle of a Letter of Credit. Digital image. Career City. N.p., n.d.Web.

More Related