Fraudulent Instruction definition
Fraudulent Instruction means any fraudulent or unauthorized written, electronic, telegraphic, cable, teletype or telephone instruction that is intended to mislead Purchaser or any other third party through the misrepresentation of a material fact related to the Products purchased or Seller. If Purchaser receives a request to modify / change any agreed upon / utilized payment process (e.g., accounts/wire instructions, updates to lock box) for its account with Seller, Purchaser must promptly direct such request to Seller and verbally receive a confirmed receipt from Seller of a test wire or payment of $1.00, prior to Purchaser accepting any changes to the payment process.
Fraudulent Instruction means:
(1) an electronic, computer, telegraphic, cable, teletype, telefacsimile or telephone instruction which purports to have been transmitted by the Organization, but which was, in fact, fraudulently transmitted by another party without the Organization’s knowledge or consent;
(2) a written instruction issued by the Organization, which was forged or altered by another party without the Organization’s knowledge or consent, or which purports to have been issued by the Organization, but which was, in fact, fraudulently issued without the Organization’s knowledge or consent; or
(3) an electronic, computer, telegraphic, cable, teletype, telefacsimile, telephone or written instruction initially received by the Organization which purports to have been transmitted by an Employee, but which was, in fact, fraudulently transmitted by another party without such Employee’s or the Organization’s knowledge or consent.
Fraudulent Instruction means an intentional, fraudulent and unauthorized instruction directed to the Insured or an Investment Adviser, that is:
1. transmitted via telefacsimile, and:
a. purports and reasonably appears to be from a Customer, a Financial Institution, or another office of the Insured;
b. was in fact transmitted by someone other than a Customer, a Financial Institution, or another office of the Insured; and
c. purports and reasonably appears to contain the handwritten signature of a person authorized to initiate such transfer that proves to have been used by an unauthorized person; or
2. transmitted verbally, via telephone, and purports to be from:
a. an officer, director, partner or employee of a Customer, who is authorized by the Customer to instruct the Insured or an Investment Adviser to make such a transfer;
b. a Customer who is a natural person; or
Examples of Fraudulent Instruction in a sentence
The Underwriter will pay the Organization for loss of Funds resulting directly from a Fraudulent Instruction directing a financial institution to transfer, pay or deliver Funds from an Insured’s Transfer Account.
Such Fraudulent Instruction received and, if applicable, Callback Verification performed, must be either recorded, logged, or documented by the Insured or an Investment Adviser.
With respect to Commercial Customers, coverage only applies if the transmittal method by which the Insured received the Fraudulent Instruction was a transmittal method authorized by the Commercial Customer in the Funds Transfer Agreement.
Loss resulting directly from the Insured having, in good faith, transferred funds on deposit in a Customer’s account as a result of a Fraudulent Instruction when the Insured, prior to transferring the funds, used its reasonable best efforts to verify the identity of the person transmitting the instruction; provided that if the instruction is purported to be from a Customer, the Insured performed an Out-of- Band Verification and followed a Security Procedure with respect to such instruction.
Such Fraudulent Instruction received and, if applicable, Out-of-Band Verification performed, must be either recorded, logged, or documented by the Insured.
More Definitions of Fraudulent Instruction
Fraudulent Instruction means an intentional, fraudulent, and unauthorized instruction directed to the Insured, that is transmitted:
Fraudulent Instruction means:
(1) With regard to Paragraph A.1.b.:
(a) A computer, telegraphic, cable, teletype, telefacsimile, telephone or other electronic instruction directing a financial institution to debit your "transfer account" and to transfer, pay or deliver money or securities from that "transfer account", which instruction purports to have been issued by you, but which in fact was fraudulently issued by someone else without your knowledge or consent.
(b) A written instruction issued to a financial institution directing the financial institution to debit your "transfer account" and to transfer, pay or deliver money or securities from that "transfer account", through an electronic funds transfer system at specified times or under specified conditions, which instruction purports to have been issued by you, but which in fact was issued, forged or altered by someone else without your knowledge or consent.
(c) A computer, telegraphic, cable, teletype, telefacsimile, telephone or other electronic or written instruction initially received by you, which instruction purports to have been issued by an "employee", but which in fact was fraudulently issued by someone else without your or the "employee's" knowledge or consent.
(2) With regard to Paragraph A.2.: A computer, telegraphic, cable, teletype, telefacsimile, telephone or other electronic, written or voice instruction directing an "employee" to enter or change "electronic data" or "computer programs" within a "computer system" covered under this Insuring Agreement, which instruction in fact was fraudulently issued by your computer software contractor. SPECIMEN
Fraudulent Instruction means an intentional, fraudulent and unauthorized instruction directed to the Insured, which is:
1. transmitted via telefacsimile, and:
a. purports and reasonably appears to be from a Customer, a Financial Institution, or another office of the Insured;
b. was in fact transmitted by someone other than a Customer, a Financial Institution, or another office of the Insured; and
c. purports and reasonably appears to contain the handwritten signature of a person authorized to initiate such transfer that proves to have been used by an unauthorized person;
2. transmitted verbally, via telephone, and purports to be from:
a. an officer, director, partner or employee of a Customer, who is authorized by the
b. a Customer who is a natural person; or
c. an Employee in another office of the Insured, who was authorized by the Insured to instruct other Employees to transfer funds on deposit in a Customer’s account; and was received by an Employee specifically designated to receive and act upon such instructions, but was in fact transmitted by someone other than a person described in paragraph W.2.; or
3. transmitted via electronic mail or electronic text, and purports and reasonably appears to be from a Customer of the Insured, but was in fact transmitted by someone other than such Customer.