In the field of the modern finance and trading, the letter of credit (L/C) has become the most common form of international payment. The L/C has solved the risk problem of non-trust between the seller and buyer in international trade. Meanwhile, the bank which aims to be safe, fast and convenience is popular by the international businessmen. In the recent 20 years, the phenomenal of L/C fraud is increasing. However, under the pressure of urgent circumstances of the L/C fraud, the UCP500 and the UCP600 which is coming to practice in a few days don’t take any measure to the L/C fraud, such as definition or stipulation of the judicial remedy. The domestic bank seems no idea about how to deal with the situation. So, the study about how to deal with the L/C fraud is of great importance to the bank. This thesis is concerned with the knowledge of trading, law and finance, and analyzes the type and the cause of L/C fraud by some typical cases. At last, the thesis puts forth some strategies about how the bank prevents the L/C fraud.