Casablanca: Inscribed check scam targets wholesalers in city's biggest markets

The Casablanca Public Prosecutor’s Office has received complaints about incidents of fraud against wholesalers from “Derb Omar” and “Qriaa” markets using “embossed checks,” learns Hespress from informed sources.

The checks were allegedly embossed with numbers written on the back with amounts paid out of their total value, ranging from one third to half of due amounts, after the suspects placed the checks as insurance for payment for goods.

The suspected customers then convinced wholesalers against depositing the checks for exchange at banks, paying part of their value and writing the remaining amount on the back of the check, which renders the checks useless.

Hespress learned from well-informed sources that the scam targeting wholesalers (holders of the checks) is exploiting merchants’ need for cash, luring them into agreeing to a partial cash payment. However, such practice makes checks bounce at all Moroccan financial institutions, leaving wholesalers with nothing but the initial and partial cash payment, with no guarantees of ever receiving the rest of the money.

The same sources added that the victims’ ignorance of the consequences of writing on the back of checks, without respecting the endorsement regulations stipulated in the Commercial Code, weakened their legal position when resorting to the judiciary.

In presenting endorsed checks as a guarantee for future payment, the suspects fraudulently convinced wholesalers that they hold the same value as certified checks.

Moroccan law, specifically Article 316 of the Commercial Code, penalizes anyone who knowingly accepts or endorses a check on the condition that he does not immediately redeem it and keeps it as collateral, with a prison sentence of between one and five years and a fine of between MAD 2,000 and MAD 10,000.

Morocco’s central bank (BAM) warned that the number of bounced checks reached 560,000 cases in just one year, an annual increase of 11.8%, while the value of these checks jumped by 18%.

In a previous annual report on financial market infrastructures, performance and monitoring and financial inclusion, BAM revealed that every month, an average of 50,000 checks are refused in the country’s banks, though the use of checks has declined in favor of card payments and online transactions.