How HYIP and prime bank fraud work
HYIP (High-Yield Investment Programs) and prime bank fraud mislead you into believing that certain investments on the international market will allow you to make a lot of money.
These investments go by many names, including:
- Prime Bank Debentures
- Prime Bank Guarantees
- High-Yield Trading and Roll Programs
- International Chamber of Commerce (ICC) Letters of Credit
- Guaranteed Bank Notes ? Discounted U.S. Treasury Securities
- International Monetary Fund Backed Securities
In reality, these investments and their markets don’t exist. Often, scam artists will remain vague or, conversely, will propose strategies that seem highly sophisticated.
They tell you for example that:
- Your investments will be entrusted to excellent portfolio managers.
- You will take advantage of a high interest rate.
- You will be able to withdraw investment income whenever you wish.
- You can buy debt securitiesA debt security is a security representing a loan or debt.
Bonds and debentures, which are loans granted by investors to a company, are examples of debt securities. at a discount secured by major banks and resell them at a quick profit.
- You will invest in quality products (securities of the top 100 world banks, medium-term bank notes, letters of credit, tax haven investments, etc.).
Recognizing HYIP or prime bank fraud
Here are some ways you can do so:
The scam artists will try to convince you that:
- The returns are attractive compared with other investments.
High-yield investments with no risk do not exist!
- Transactions are strictly confidential and investment opportunities of this type are by invitation only. You may be asked to sign non-disclosure agreements.
This allows them to ensure that you won’t seek outside advice.
- Your investment is issued, traded, guaranteed or endorsed by the World Bank, the International Monetary Fund (IMF), the Federal Reserve, the Department of the Treasury, etc.
This is not true.
- You have access to programs that otherwise would be reserved for top financiers on Wall Street, large pension funds and the wealthy elite.
This is also a lie.
- You are required to open a virtual currency account, such as Bitcoin, to “facilitate transactions.”
The anonymous nature of virtual currency transactions makes it easier for fraudsters to carry out their schemes.
There is no such thing as a high-yield investment with no risk!End of the warning
Avoiding HYIP and prime bank fraud
As for any investment :
- Be cautious if you are guaranteed high, risk-free returns.
- Don't invest if you’re asked to maintain secrecy.
- Ask for advice from a representative authorized by the AMF, request a prospectusA prospectus is a detailed information document that a company must prepare to be able to sell securities (such as shares) to the public.
It must provide full, true and plain disclosure of all material facts likely to affect the value or market price of the security in question. , look for articles in specialized publications, etc.
- Always check whether the person and firm offering you an investment are authorized to do so. When in doubt, contact our Information Centre.
Have you received this type of offer? Call the AMF to determine whether it involves fraud, and if so, to report the matter.
Register of firms and individuals authorized to practise
Check whether your representative is authorized to sell. you the product he is offering youEnd of the insight
Documentation and tools
- Red-flagging financial fraud (pdf - 7 MB)This link will open in a new windowUpdated on 23 October 2015
- Choosing an Investment Dealer or Representative (pdf - 4 MB)This link will open in a new windowUpdated on 22 August 2016
- Trop beau pour être vrai? Méfiez-vous! (Available in French only) (pdf - 409 KB)This link will open in a new windowUpdated on 25 November 2009