How secure is a Banker's Draft?

Tommygunn

I'm about to accept a payment with a bankers draft but not having ever had experience of one I'm after some advice.
How secure is a BD in comparison to a cheque or cash/IBAN payment? If the BD funds have cleared can the money be taken from my account if it turns out the BD was fraudulent, later on.
Basically, once the money has cleared am I safe and sound?

What other details should I ask for from the other party? Issuing bank, is it UK?

Any help appreciated.

richt71

A bankers draft is drawn on the banks own funds and not a persons own funds with a bank so pretty secure!

sdooley

Bankers Drafts and Money Orders are widely used in fraudulent transactions. They are 'cleared' funds but that only means that there were funds in an account, the draft can still be 'stopped'. You would then have to sue the person who stopped the draft/money order.

If you have received an 'overpayment' from someone, followed by a request for a refund, that would be a definit e warning sign of fraud.

Tommygunn

So, is it as good as cash once cleared? If it turns out to be fraudulent, at a later date, can the money be lawfully removed from my account and returned to the rightful owner and I'm left with no money and no goods?

This is for a sum of £3400, or thereabouts, so I need a guarantee that a BD is going to pay out without problems further down the road.

nomoneytoday

I would only accept one if I saw it being written in the branch.

Tommygunn

That's one of the problems. I'm in Italy and my friend is taking care of the items that I am selling therefore he will have to deal with the BD. So, I'm essentially out of the loop and hands off, apart from organising it all.

I take it everyone therefore recommends one of the following payment methods instead:
Direct bank transfer - IBAN
Internet banking transfer
Cash in account or in hand.

maninthestreet

What is the payment for? If you're selling something, e.g a car, and the person has offered to buy the car without even seeing it, sent you a BD that is for more than the agreed price for the car, and wants you to send the difference via Western Union or Monrygram, then it's DEFINITELY a scam.

tyllwyd

I'm sure I've seen cases in the Sunday papers where people selling cars have checked bankers drafts with their banks, paid it in over the counter and handed over the car but then had the bank reject the draft a few days later. So be careful - maybe ask your bank what you should do.

Tommygunn

I'm selling four deactivated firearms through various militaria classifieds.

I've already had one so and so who wanted to buy one gun for £650 but said he would post me a BD, from his associate, for £2800. Of that £650 for the gun and £100 for my trouble to wire the remainder(£2050) to his collection and shipping company.
Of course 'Money Laundering' etc sprung to mind.

It certainly does not impress me that various people contact me as if I'm their best buddy on a text message. This is a formal contact so treat it like a letter.
It would certainly make you more credible as a fraudster.

O

Tommygunn

What I would do if I did accept a BD is wait until it had cashed before releasing the goods.
However, as mentioned, does this secure the funds in my account if proven to be fraudulent. I presume the rightful owner could legally retrieve the funds from my account and I would be left with nought.

jonesMUFCforever

I would get an electronic payment into my account before releasing goods.
Bankers drafts can be forged and are as safe as only paying any other cheque into your account.

The new regulations in force now means that you should be safe if after 6 working days of you paying it in it has not been returned.