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Prime bank guarantee fraud

Prime bank guarantee fraud involves a bogus investment scheme promising quick riches in a short space of time by buying bank guarantees from ‘prime’ banks.

Fraudsters will invite you to join a scheme that they claim will make you rich quickly through bank guarantees. They tell you they can buy the bank guarantees at a discount and sell them shortly afterwards at an enormous premium. By investing a large sum in their scheme, you’ll make a big profit. However, once you part with your money, it will disappear - along with the investment company.

The fraudsters will tell you that you’ll be part of a group of extremely rich investors.

They may tell you not to seek professional advice because the information is reserved only for those taking part in the programme, and the scheme is by invitation only.

The fraudsters may also say that you could be thrown out of the scheme and taken to court if you seek independent advice.

You might even be informed that the well-known banks listed on the documents can’t discuss the deal with you unless you are a main investor.

The fraudsters will try to make the scheme appear legal by giving you documents that appear complex, sophisticated and official. They may falsely tell you that all your funds will be secured by a letter of credit, a bank-endorsed guarantee or another guaranteed certificate supported by the world’s major banks. Or they may tell you that the scheme is risk-free or sanctioned by the International Monetary Fund (IMF).

Are you a victim of prime bank guarantee fraud?

  • You’ve received, or accepted, an invitation to join a scheme based on investing in bank guarantees.
  • You’ve bought bank guarantees at a discount, believing they were low risk.
  • You’ve been told that, if you seek independent advice, you’ll be ejected from scheme.
  • You’ve parted with money and are no longer able to make contact with the investment company.
  • You’ve received documents that appear official and complex, but are unintelligible.
  • You've tried to sell on the bank guarantees at a premium.

What should you do if you’re a victim of prime bank guarantee fraud?

  • If you think you have been a victim of a prime bank guarantee fraud:
  • report it to Action Fraud
  • contact the Financial Services Authority.

Protect yourself against prime bank guarantee fraud

  • Although foreign banks do use bank guarantees they are never sold or traded, so don’t trust any scheme based on these.
  • There is no such thing as a high return investment that is risk free.
  • If something seems too good to be true, then it usually is.
  • Always make sure you fully understand how the investment works. Challenge what you’re told; investigate the company and its claims. Is it registered in the country where it claims to be based? Who are the directors? How exactly does the investment company claim to make its money? Can you withdraw your money easily and quickly?
  • Make sure that all papers are checked by an independent financial advisor, or an accountant. Take legal papers to a lawyer before signing them.
  • Don’t be pressured into signing a contract at a presentation.
  • Make sure you know the legal and tax rules associate with offshore investments.
  • Think very carefully before investing any of your money. Make sure you are 100% certain the company is legitimate.

How to report it

If Fraud has been committed report it to Action Fraud. For more advice and to raise any concerns, contact the Office of the Public Guardian.

Source - Action Fraud

Date Published: Jul 22, 2018

Types of fraud

A-Z of fraud

To help understand which fraud you've been affected by, we've categorised them into an alphabetical list.

What is fraud and cyber crime?

Fraud is when trickery is used to gain a dishonest advantage, which is often financial, over another person.

Advance fee fraud

Advance fee fraud is when fraudsters target victims to make advance or upfront payments for goods, services and/or financial gains that do not materialise.

Corporate fraud

Corporate fraud can be any fraud committed against a business.

Individual fraud

Individual fraud could be any fraud that targets a person directly. Individual frauds can differ from frauds affecting businesses and other organisations.

Online fraud

Some fraudsters rely on the internet to commit their crimes. Learn about some different types of internet frauds that and how to protect yourself and get safe online.

Identity fraud and identity theft

Identity theft is when your personal details are stolen and identity fraud is when those details are used to commit fraud.
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