In magic pen fraud scams, victims (customers) are tricked by fraudsters into signing on blank cheques or security cheques using a pen with erasable ink.
Fraudsters acting as representatives of a reputable organization, like banks, approach customers with a request to issue signed blank cheques. They persuade customers to fill in the details on the cheque using their ‘magic’ pen.
The ink in these pens is erasable or disappears some time after being used. When that happens, the fraudsters rewrite a different (larger) amount or change the beneficiary name and encash the cheque through a third party.