To make business transactions safer and ensure evidence of the payment we think an account payee cheque or pay order is the best option. But most of the time account payee cheque doesn’t ensure safety. Here, I’m going to discuss the factor which helps you to understand; Is the Account payee cheque really safe? why an account payee cheque or pay order is not always safe? and the best practice of paying account payee cheque or pay order for the transaction.
First of all, we know about what is account payee cheque?
Usually, we use or found the following types of cheques:
1. Bearer Cheque
2. Order cheque.
3. Crossed cheque.
4. Open cheque.
5. Post-dated cheque.
6. Stale cheque.
7. Traveler’s cheque.
8. Self cheque.
Among the above mentioned types of cheques Crossed cheque is termed as account payee cheque which means if a cheque is crossed then you cannot pay the cheque over the counter or pay in cash, either the account holder of the cheque is not canceled the account payee by countersigning it.
Read also: What are the reason for Cheque Dishonour?
Facts faced by people in case of account payee cheque or pay order:
Normally, keep in mind security and evidence fact we pay account payee cheque for settlement of our personal or business debt. But only an account payee cheque is not sufficient enough. Because if you issue an account payee cheque in favor of “Mr. Kamran Ahmed” just in the case goes to wrong “Mr. Kamran Ahmed” he can easily transfer it to his account.
Alike if an account payee cheque is issued in favor of “M/s Friends & Company Ltd.” any company operating in the country named “M/s Friends & Company Ltd.” can easily encash it into the account.
A real fact happens recently in a reputed bank in our country that a cheque issued in favor of “M/s XXX Ltd.” mistakenly it goes to a fraud person he Tactically open an account with this bank as same mentioned in the cheque and transfer it to his account. It is also really difficult to identify in the case of clearing cheques.
Another example is, an insurance maturity amount cheque issued in favor of ‘Saleha Begum’ but at the time of deposit it to the bank insurance staff mistakenly deposit it to other ‘Saleha Begum’ who is also their client.
So long as the insurance authority found out their mistake in the meantime wrong ‘Saleha Begum’ withdrawn this amount. They have to face hazards to get back this amount. And they get it back because she is their client.
To prevent this fraud a simple trick may be more helpful. At the time of issuing an account payee cheque and bank official at the time of issuing a payment order if we mention 13- or 17-digit account number along with account title.
For example: in the space of, “Pay to’ write Mr. Kamran Ahmed; A/c no: 2568101******. No one can make fraud this cheque or transfer it into other Mr. Kamran Ahmed’s account. In the case of Payment Order write the name of the person or organization to whom the Payment Order is issued along with the account number.
