Fine for forged bank reference letters

Like many banks, American Express Bank (AEB) requires customers who want to open accounts with it to produce letters of reference from other banks stating the length of the customer's relationship with the other banks. This is now standard practice as part of the KYC (Know Your Customers) requirements for banks to stop money laundering and terrorist financing.

Ho Nyat Yeing, who was relationship manager with AEB, found it difficult to obtain these letters. She therefore forged reference letters using blank letterheads from other banks. In court, she pleaded guilty to 11 out of 79 charges. As no loss was caused to any party, shre was fined $41,000.

There are other relationship managers who have been caught in similar situations, with some of them having already been sentenced by the courts.

Forged cheques again

In a previous posting in April 2009, I raised the issue of cheques with forged signatures. Banks are under common law liable for the value of such cheques as they are not allowed to pay out under the cheques except if the actual signature of the customer is present. However, the banks use contractual clauses to shift the risk of forged cheques onto the customer.

Mr Michael Hwang, Senior Counsel, and President of the Law Society, has now raised the issue of whether the banks should do so. He has raised the issue with the Association of Banks, the Consumers' Association of Singapoe and with a Cabinet Minister. However, nothing has made banks change their minds about the use of such clauses. He mentions that in Malaysia and in Hong Kong, customers will not stand for the use of such clauses. Hopefully, the business community acting through trade associations and the like will exert some pressure on the banks to change.

In the meantime, for us individuals, there is always the issue of whether we can rely on provisions of the Unfair Contract Terms Act to try to argue that the banks' clauses are invalid.

Bank officer's fraud

Former bank officer, Ms Lynette Ng Pei Ling, was sentenced to 3 months for her offence of forgery in July 2007. As a relationship manager with United Overseas Bank, she had forged a letter purportedly from the bank guaranteeing a customer Mr Lok Kok Seng 10% returns per annum for 4 years. She made full restitution, an important fact in the court sentencing decision.

She later jointed HSBC but in court, said that she had lost her job.

She was supposed to obtain a $1,440 commission from the sale of a $150,000 investment to Mr Lok.