Home > Financial Scams > Prime Bank Guarantee Scam

Prime Bank Guarantee Scam

By: Chris Nickson - Updated: 9 Nov 2012 | comments*Discuss
 
Prime Bank Guarantee Scam Imf Letter Of

The prime bank guarantee scam is a high stakes swindle that was first warned about in 1993. It has the lure of big money, big institutions, secrecy and playing on a large international stage. But the bottom line is that it's just as much of a swindle as anything else - just on a bigger level; according to the International Chamber of Commerce, this type of scam involves £5 million daily in North America alone.

How It Works

Someone - possibly a good friend or relative - invites you to join a scheme that will make you rich through access to "bank guarantees" which they say can be bought at a discount and sell shortly thereafter at an enormous premium. The likes of pension funds are on stand by, to buy "Prime Bank letters of credit" from large banks. However, the regulations mean that the deals have to go through a middleman. Often the claim is that you'll make a 20% profit within 30 days.

With the amounts being discussed, you'll be part of a pool of investors dealing on the same level as oil sheiks and the world's richest. You'll probably be told not to bother seeking professional advice because the information is reserved only for those who participate in the program, which is "by invitation only." Indeed, secrecy is so important that you'll be thrown out and maybe taken to court if you try to obtain an independent assessment. Even the bank listed on the documents (supposedly some of the world's largest) can't discuss the deal unless you're the principal investor.

You might well be told that there's no need to worry because every last pence is secured fully by a 'Letter of Credit', whuc is a bank-endorsed guarantee or any other guaranteed bank certificate supported by the world's top or "prime banks," or that it's risk-free and sanctioned by the International Monetary Fund, that it has an "IMF Number", an "IMF Country Registration Number," or an "IMF Approval Number for Projects."

What they will claim is that this is a "roll programme," in which the funds are leveraged several times to maximise the returns. However, when it's time to pay up, your investment, and the company behind it, has vanished.

How To Avoid The Scam

The first rule of investing is to question everything that "guarantees" you a high return. There simply are no risk-free high returns. The higher the possibility, the greater the risk of loss.
No legitimate transaction would actively discourage you from investigation. In fact, the greater the amounts involved, the more transparent everything should be.
Investigate everything thoroughly before investing your money, especially at these levels (generally a minimum of £10,000). If they threaten to expel you or not let you in, simply walk away.

Be aware the foreign banks do use "bank guarantees" in the same manner that U.K. banks employ a system were letters of credit are used to insure payment for goods in international trade; these bank guarantees are never sold or traded on any kind of market.You should also know that the IMF does not operate through other agents and it does not endorse the activities of any bank, financial institution, or other public or private agency.

Remember that producing authentic-looking documents is relatively easy, as is forging signatures. You should do nothing before consulting both a lawyer and your independent financial advisor. Never invest unless you completely understand the deal. Con artists will try to bamboozle you with complex terms and maths. Never invest more than you can afford to lose. All investment is a risk.

What To Do If You're A Victim

Inform both the police and the Financial Services Authority. Make sure you have copies of all your paperwork, and notes of all phone conversations, including dates and times, they can follow up, and if they find the perpetrators, prosecute them.
Be aware, though, that the chances of recovering your money are small. This is an extremely complex scam perpetrated by professionals.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
  • Amira
    Re: Sky TV Scam
    I’ve just had a phone call from a man claiming to be from sky telling me that he needs me to log into my computer so that he can help me set up my new…
    6 July 2020
  • Yak
    Re: Sky TV Scam
    Just had phone call saying my sky broadband wasn't working correctly and could I go to my computer and log into sky There is nothing wrong with my…
    29 June 2020
  • Enzo11
    Re: Congestion Charge Scam
    Due to payment failure your Congestion Charge Auto Pay service will be suspended on 05/04/2020.To pay log onto tfl.gov.uk/congestioncharge…
    31 March 2020
  • Sue
    Re: Sky TV Scam
    I just had phone call but it was from my own number saying they were sending me new box as mine was out of date. The address they had I moved from ten…
    18 March 2020
  • Watchful
    Re: Vishing Scam
    Ordered an item on eBay, due for delivery next day. Received a text message from 38794 asking me to confirm the contents of the box, as the item was…
    12 March 2020
  • Mow
    Re: Sky TV Scam
    Just had a scam call regarding SKY. Man gave me a name, telephone No. and reference. Said that my signal was being interfered with. Gave me another IT…
    18 February 2020
  • Tee
    Re: Safe Travel Gigolos
    I had a Driver pursue me for about 3 months by showing up at places I frequented & buying me drinks. After deciding to give him a chance, his…
    4 February 2020
  • M.U.
    Re: Vishing Scam
    Partner received text from Royal Mail requesting money for settlement of £2.99 on the following link: http://bit.ly/35G8D8U. Before they would deliver…
    13 January 2020
  • M.U.
    Re: Vishing Scam
    My partner has received a text saying " Your Royal Mail Parcel is due for delivery. Please confirm the settlement of £2.99(GBP) on the following…
    13 January 2020
  • Tiny
    Re: Vishing Scam
    I've received a text message saying it's from Royal Mail, it says there is an item waiting to be collected its gives a http link the rest of the text…
    16 December 2019