Bill Discounting Fraud Law and Legal Definition
Bill discounting fraud refers to a type of fraud in which a fraudster presents himself/herself as a genuine, profitable customer before a bank by using a company. After that the company will regularly and repeatedly use the bank to get payment from one or more of its customers and thereby give the bank the picture of a desired customer. Since the customers in question are part of the fraud these payments are always made. They will also actively pay any and all bills raised by the bank. Eventually, when the bank is happy with the company, the company will request the bank to settle its balance with the company before billing the customer. Even after this, the fraudulent company will carry on business along with its fraudulent customers and the unwitting bank. When the outstanding balance between the bank and the company is sufficiently large, the company will take away the payment from the bank. Subsequently the company and its customers will disappear leaving no-one to pay the bills issued by the bank.
