How can their clause over-ride the statute? What nonsense is this?
Account holders better exercise their rights or move to Bank of China where service is excellent
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Oct 2, 2009
Liable for forged cheques?
By K C Vijayan, Law Correspondent
THE president of the Law Society has pointed to a disparity between the law and how banks treat cases of forged cheques.
Under the Bills of Exchange Act, a forged signature is not considered to be a legitimate approval by a customer allowing the bank to debit his account.
However, most banks have an exclusion clause in their terms and conditions which states that they will not be liable if their customer suffers a loss as a result of forgery, said Senior Counsel Michael Hwang, in the latest issue of the Law Gazette.
The issue of who should pay comes in the wake of rogue lawyer Zulkifli Amin, who fled with $6 million, having encashed cheques on which his law firm partners' signatures were forged.
'It left (the remaining partners in the law firm) with heavy liabilities to their clients,' said Mr Hwang, as the bank is disputing that it is liable for the forged cheques.
He cited another instance: in 2007, when a local charity found that one of its staff signed dozens of forged cheques and left them with multi-million dollar losses, it was likely the bank would have got away with an exclusion clause.
'The risk is real,' he warned, pointing that major banks here have the same exclusion clause in their terms in dealing with customers and it falls foul of the Act.
'They did not highlight to their customers that over time they had excluded liability under (the Act), so hardly any customers in Singapore know that the risk of loss for forged cheques would be placed on them.'
The senior counsel added that such clauses while widely used here, are not generally used in Malaysia or Hong Kong, 'even by the same banks that use them here, because the market in those countries will not take it'.
Read the full story in Saturday's edition of The Straits Times.
Account holders better exercise their rights or move to Bank of China where service is excellent
Home > Breaking News > Singapore > Story
Oct 2, 2009
Liable for forged cheques?
By K C Vijayan, Law Correspondent
THE president of the Law Society has pointed to a disparity between the law and how banks treat cases of forged cheques.
Under the Bills of Exchange Act, a forged signature is not considered to be a legitimate approval by a customer allowing the bank to debit his account.
However, most banks have an exclusion clause in their terms and conditions which states that they will not be liable if their customer suffers a loss as a result of forgery, said Senior Counsel Michael Hwang, in the latest issue of the Law Gazette.
The issue of who should pay comes in the wake of rogue lawyer Zulkifli Amin, who fled with $6 million, having encashed cheques on which his law firm partners' signatures were forged.
'It left (the remaining partners in the law firm) with heavy liabilities to their clients,' said Mr Hwang, as the bank is disputing that it is liable for the forged cheques.
He cited another instance: in 2007, when a local charity found that one of its staff signed dozens of forged cheques and left them with multi-million dollar losses, it was likely the bank would have got away with an exclusion clause.
'The risk is real,' he warned, pointing that major banks here have the same exclusion clause in their terms in dealing with customers and it falls foul of the Act.
'They did not highlight to their customers that over time they had excluded liability under (the Act), so hardly any customers in Singapore know that the risk of loss for forged cheques would be placed on them.'
The senior counsel added that such clauses while widely used here, are not generally used in Malaysia or Hong Kong, 'even by the same banks that use them here, because the market in those countries will not take it'.
Read the full story in Saturday's edition of The Straits Times.
