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Magic Pen

What is magic pen fraud?

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.

How it happens

  • Step 1

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.

  • Step 2

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.

How to prevent magic pen fraud:

  • Never issue a cheque without first completing all details, including the beneficiary’s name, using your own writing instruments.
  • Before handing over the cheque, verify the identity of the representative via a valid photo identity, or contact the beneficiary or institution they claim to represent using a landline number.

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