This scam begins as an offer to join an exclusive investment program normally reserved for high-roller international investors with a return rate as high as 100%.
You receive an offer to get in on an exclusive investment program that’s usually reserved for only the top international financiers. This investment opportunity involves the trade of extremely complex “prime bank” financial instruments that are promised to generate huge returns that could reach 100%.
The crooks running the scam will probably have all kinds of documentation, contracts and brochures for you to read and the names used will sound official and legitimate. Some will even point out that they are not a “prime bank” investment in attempt to trick investors wary of prime bank scams. But the basic premise of the investment opportunity, the trade of prime bank or other financial instruments, is exactly the same. Only the name has been changed to protect the guilty. Despite the layers of complexity, the shiny brochures, and the slick sales pitch, prime bank scams are, at their core, very simple. Once you know what to look for, they can be detected and avoided.
Prime Bank Scam Warning Signs
- The promise of huge returns. A legitimate investment will usually not include the promise of a high rate of return. Any investment involves risk. That means you could lose money. If you’re promised an outrageous rate of return you should be wary. Promises of large returns without risk have “fraud” written all over them. Don’t let your greed take over. Think before you invest.
- Your investment doesn’t exist. You may be promised that this investment is guaranteed by the International Monetary Fund or even the Federal Reserve but despite the official sounding names of the financial instruments you are being asked to invest in and the institutions supposedly involved it’s all a lie. Look out if you’ve been asked to invest in the debt obligations of the world’s top 100 banks or offshore trading programs or high yield investment programs (HYIPs). Do your homework and verify the existence and legitimacy of programs you invest in. Don’t let the people making the investment offer tell you where to look for references. If it’s a real company you should be able to locate some information on your own.
- Secrecy. If you are told that this investment opportunity must be kept secret by all parties and that because of this no references are possible you should start worrying. You may be told that, when questioned, banking officials are required to deny this programs existence or that the instruments you are being asked to don’t exist. Don’t worry because they really do exist. Wink, wink.
- Lack of details. While some of these scams provide so much documentation and so much complexity that you could never understand what you are investing in, some are the exact opposite. They will tell you that the financial instruments are so complex that they can’t provide you with any details.
How to protect yourself from Prime Bank Scams
Like most scams you should avoid any claim of high returns with no risk. This goes for just about any investment. Investing involves a degree of risk but if you fall for a scam the risk factor just went to 100%. Do some research before you invest and be especially careful if you find the investment opportunity on the internet or the offer is made from a telemarketer. Don’t assume it’s a real investment because it’s complicated and there are contracts and for you to sign.
Con artists go to a lot of trouble to create elaborate schemes because stealing money from people is their business. Scammers realized a long time ago that complex yet phony businesses sometimes fool people. Consult a lawyer or a knowledgeable friend or do some research before any money changes hands. It’s generally a bad idea to invest in anything that you know nothing about and this is a good example why. When large sums of money are involved do not take anyone at face value. Protect yourself by looking into any business you are about to sink a lot of money into.