High-Yield Investment Scams

You're told about an investment opportunity which promises very high returns on your money.

Beware of fraudulent high yield or prime bank guarantee investment plans. These types of scams are known variously as High Yield Investment fraud, Prime Bank fraud or advanced fee fraud. There are a myriad of schemes and scams with proposals purely designed to facilitate victims parting with money.

It is impossible to describe how each scheme works as the only boundaries that are known are the scope and depth of the fraudsters imagination.

Some examples are:

Banks from remote areas of the world offering Bank Guarantees for hundred's of millions of dollars.
US Federal Reserve Notes recovered from a World War Two Plane crash site in the Philippines.
Historical US Railway Bonds.
Pre-World War 2 Hitler's Gold Bearer Shares recovered from a lake in Austria.

The list is endless.

The common theme throughout is that all these schemes are designed to part the unwary from their money.

This is the basic structure of how the various fraudulent schemes may work. This is not the "be all and end all" as the schemes are constantly evolving. Any investment scheme which is out of the ordinary with high rates of return yet with little or no risk should be treated with diligence.

If you are offered any investment scheme which offers high investment returns that could not be obtained on the high street or by normal investment procedures, compare any papers you have been shown against the lists on the Common phrases and Common statements pages.

Some of these terms may be correct banking expressions or close derivations of them. Some may be just meaningless or nonsensical however they have been used so many times over the years that they themselves have gained some history and credibility. The inclusion of several of these expressions in any document being examined should give cause for concern.

Here are some commons characteristics of these scams, which should set alarm bells ringing. The paperwork you'll be given generally consists of complicated, legal-looking documents containing errors such as spelling mistakes and incorrect place names.

Here are some common phrases which fraudsters will use but which real banks won't:

Risk Free
High Rate of Return
"Secret" Offshore Trading
Non-disclosure, non-circumvention
Confidentiality agreement
Non-solicitation agreement
Letter of intent / proof of funds
Good, clean, clear funds of non-criminal origin

If you check with the British Bankers' Association (BBA), for example, you'll find the 'companies' offering these investments aren't licensed and the programmes they're pushing are not available from legitimate brokerage firms.

Click here to visit the Financial Services Authority Register yourself.

High-Yield Investment Scams

Frauds and Scams