In my line of work we have clients asking to pay large sums by LC but we always refuse because we don't know how to cash it since they're not receiving the goods either way so if you can cashout LCs PM me asap
Need Someone Who Understands and can Cashout Letter of Credit
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LC's cant be "cashed out" without the issuing sides confirm.
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- #3
there are terms on LCs some have clauses to cash out part of the money before shipment, but i also know there are people who have operations targeted at cashing out LCs there are few things that can make LC work perfectly if the team is good at what they do.
None of those terms work if the other sides issuing bank doesn't approve. No, there are no such teams that can cash out a LC due a simple fact that without authorization from the issuing bank, the receiving bank just cant debit the issuing banks corresponding account. The only way to cash out a LC without providing the shipment is to fake the documents where the shipment is provided and make the issuing bank to accept them and thus authorize the debiting of its corresponding accounts, however, any provided documents to the issuing bank will always be cross-checked with the client that ordered the LC or have to be received directly from the client the ordered the LC.
A long time ago, somewhere in the late 1970's - early 80's, banks didn't always use electronic communication and it was possible to sometimes get lucky and cash out LC's by sending a heap of documents by simple mail - the fairy tale about teams doing this, still lives since that day.
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Okay so what if i have like documents that can be verified like a BL with tracking and container numbers bought from the internet and then have a connection with someone in my bank will that work? and will the money go back to the client in case of a red flag?
Your connection from the bank will still have to send the docs you will provide, or at least a notification of acceptance of such documents to the clients bank. Or he can fake that in your bank and basically rob your bank, but this sort of fraud is easily investigated and will lead to your friend in the bank, even if he uses some of his colleagues access. Red flags are per-bank individual and in most cases the client has to have someone manager level to get a LC and the manager 100% gets notified about anything that can happen to his banks money. Do-able if your connection in the bank doesn't actually know you, as this will lead to him telling everything he knows.