Reply to Request for Bank-to-Bank Verification of POF Status
* Regarding historic POF (Proof of Funds) letters we have received:
— Experience from Programs & Providers is that 90+% of all POF are invalid or fraudulent
— In many instances the underlying funds or assets are encumbered or otherwise not viable for Programs or Providers
* Legal Reason Providers do not request a Banker to Verify POF texts
— If Client’s banker tries to verify an invalid POF letter, then all parties & others are reported for
participation in a potential bank fraud.
— Programs/Providers INSIST that this is part of our Function.
— If we permit an unqualified Client to meet the Principals, the appointees will be FIRED for not performing there due diligence function. I/they do NOT know you, so I /they will not risk losing Providers/ Client because you say “trust me, my POF is valid”.
— I/they would rather lose a potential Client than submit one invalid Client and lose Programs/
- Provider as a Client.
– Most common “invalid” issues discovered:
- Client is not a signatory on the account (example: assignments without signature authority over account)
- Bank will not issue bank-to-bank swifts as required (MT 760 for High Yield Program, MT 103 for purchase of Fresh Cut Bank Instruments, MT 799 for purchase of Slightly Seasoned Bank Instruments)
– Funds are liened or encumbered or otherwise restricted.
– The licensed Attorney, being permitted to professionally and tactfully verify a POF (especially since the Client will be on the phone with Attorney and the only questions Attorney will or can ask are listed in the Authority to Verify letter, given to both Attorney and the Client’s Banker).
* Why a Banker is not available for POF verification
— Personal banker is not an agent of Providers/Programs, so they have no role to play for
Clients
— Programs/Providers do not wish to ask their bankers to verify POF’s since 90%+ are historically invalid.
— Programs/Providers do not wish to disclose their bankers and confidential information to
potentially invalid Clients or Brokers
* How to perform a POF verification ?
— 1st – Client provides me with POF letter from Client’s bank to Client
Client provides Authority to Verify to Attorney and copy to Client’s bank.
— 2nd — Attorney will call one of the 2 bankers who signed the POF letter, with the CLIENT on the phone..
— 3rd — Questions Attorney will ask Banker (they are listed in the Authority to Verify text — see Attachment):
1- Are you bank-authorized to sign a POF letter for the dollar amount in this POF text ?
2 – Is this your signature (as opposed to it being a forgery) ?
3 – Is the letter factually correct ?
(Other questions required only if POF letter does not contain all required information “Elements of POF…”
— This verification is handled professionally and with courtesy.
Since the Client is on the phone the Client is assured no improper questions are posed.
* BOTTOM LINE:
The requirement that Attorney will verify a POF letter is a non-negotiable issue. If Attorney is not permitted to perform this due diligence inquiry, then Attorney’s Principals (Programs and Providers) will discharge Attorney and Attorney will not be permitted to provide direct access to you or any Client to Programs/Providers.
FROM; Attorney to Programs and Providers.