The Citi has been Sleeping-Part II

Following the earlier post let me continue to narrate some simple steps that I have started to take after the incident with the Relationship Manager of the bank. Mind you none of them is rocket since or some thing new, I am sure each one of you know them but it is a matter of practice to implement them:

1. Never ever sign blank forms. No matter how busy you are, signing blank forms is not very different from signing blank checks.
2. Always keep a photocopy of the documents you are signing. If a photocopier is not handy take pictures of the forms with your phone camera. The pictures will not win any award but will still be better than not having any photocopy of the forms you have signed.
3. Always keep the number of the supervisor of the person you are dealing with handy so that you can speak to the next level in case of any issue.
4. All the checks should always be given in names of the Asset management company/scheme you are investing in and should be crossed across.
5. Never ever give cash. All investments should be done using checks and only checks or electronic transfers if you are tech savvy.
6. Keep a photocopy of the checks along with the signed and filled forms for your records.
7. Once you have given the papers to the RM/bank employee follow it with an email to the employee, his /her supervisor and the customer service email box, mentioning the date, amount and the scheme you are investing in. This will ensure that people other than the person who is collecting forms from you are aware that the RM has collected checks from you. This will also scare away any body planning fraud as they would not like to mess up with somebody keeping records meticulously.
8. If you do not get your statement within the promised time period immediately follow it up with the banks RM and if he does not return your calls immediately escalate.
9. Most new accounts require copies of your PAN card or address proof etc. Always sign these photocopies and also write what you are giving them for. E.g if it is for opening a mutual fund account. Next to your signature mention that : Photocopy being given for MF account for XYZ company. This way nobody will be able to make further photocopies and use the same for opening a fraudulent account in your name. ( ID theft is a big problem in US)

Relationship managers are assigned to privileged customers of the bank and most of them are very decent people, unfortunately their goal is to sell, sell and sell some more to you. It is not always that there goal and your goals are aligned to each other. I was ok with a smooth talking sales man trying to sell me for his commission but what has happened in Citi bank's case is a pure case fraud where money from an investors account has been taken out.

SEBI has now mandated that a third party check cannot be accepted for a Mutual fund transaction, so this will reduce the element of fraud to some extent, but you never know.

So in order to protect our own interest it is important that we be more vigilant with our own money and very careful what we sign or not sign.

The Citi has been Sleeping

Contrary to the tag line, the Citi has been sleeping while the hard earned money of highly respected entrepreneur Sanjeev Aggarwal was being siphoned off.

This is a classic case of trust being broken by the Relation ship manager of a bank. I would agree with Mr. Aggarwal that this is a systemic failure and more than one person at the bank may be involved.

How do we ensure that this does not happen to you and me?

Let me go back a few years and narrate an incident that happened with me some time back.

I was approached by a representative of a private bank for investment in a savings cum investment plan. I was given a lot of papers to sign, since I was busy the banks RM asked me to sign on some “ X “ marks othe papers with the assurance that he will fill the rest. He told me to sign on all the “X” which were total of 6 in numbers. I did the same and also gave him the check from my bank account. This was on a Friday afternoon and the papers were to be presented in bank on Monday morning.

Later in the day I just thought of adding my wife’s name to the investment, so I called the RM and asked him the process of adding the name of my wife to the new investment cum savings plan. He first said that we can do it later but on my pestering agreed to come to my home on Saturday morning to take signatures of my wife on the papers.

Next day he came to our home and gave papers to us, as we were chatting I asked Mrs. to sign on the 6 X marks on the papers. Now my wife has worked earlier as an auditor with a CA firm and is very thorough with documents. She counted the X marks and said there are 7 X marks on the papers. I was surprised and said no there should be only 6, to this the RM quickly intervened and said that no sir there are 7 X marks and you have also signed on 7 X marks. I checked the papers and counted their indeed were 7 X marks. This totally confused me as the day before I have counted all the X marks and signed and only 6 X marks were there. The RM suddenly showed and urge to leave as he had other appointments and said sir please don’t worry if there are 6 or 7 places to be signed as the account is any ways is in my and my wife’s name and in case of any problem he is anywhere there to help me.

But my wife was not happy with this answer and started looking at the papers again. Then she pointed to one of the signs that I have done which was not matching and was not as free flowing as my other signatures. This was the “Eureka moment” for me and immediately I understood what has happened. Mr. RM has forgotten to put all the X marks the day before and since he did not wanted to come again to get only one X signed by me he has simply forged my signatures on the form. Needless to say I was furious and this account was never opened, though the RM tried to convince me that he did this just to save time for me and typically the RMs do this help save time to the clients. But I was very clear any body who can try to forge my signature on account opening form can do that later also when the money is transferred in this account.

In the next blog I will write about how to avoid such situation by taking some very simple precautions.

Thanks for reading do leave a comment.