Prime Bank and other HYIP Investment Schemes
HYIPs (High-Yield Investment Programs) and other “prime bank” scams are fraudulent schemes involving purported international investing programs that promise astronomical profits.
Many credible-sounding names are used to lure investors, such as:
- 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
These types of investments and the markets on which they are purported to trade do not exist. Fraud artists claim that your investments will be entrusted to experienced portfolio managers.
For example, fraud artists will say that your funds will be invested over a certain period (hours, days, months or years) and carry a high interest rate. They promise that you will be able to earn, according to the investment period selected, interest income and receive the interest whenever you wish. Or they might say that they can buy debt securities at a discount secured by major banks and can resell them at a profit very quickly. Investment pitches are frequently vague and appear sophisticated to give the scheme an air of legitimacy.
Promoters of the scheme may also ask you to invest in the securities of the top 100 world banks, medium-term bank notes, letters of credit, tax havens, etc.
Hallmarks of prime bank and other HYIP fraud
- You are offered unrealistic returns of 10 to 200% per month or more, absolutely risk-free. There is no such thing as a high-yield investment with no risk.
- You are told that transactions are strictly confidential and that investment opportunities of this type are by invitation only. This type of investment is said to be one of the best-kept secrets of the financial industry. You may be asked to sign non-disclosure agreements for all sorts of obscure reasons. Fraud artists don't want you to ask anyone for advice.
- Promoters frequently claim that 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.
- Potential investors are told that they have special 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 to “facilitate transactions.” The anonymous nature of virtual currency transactions can help fraudsters carry out their scheme.
How to avoid prime bank and other HYIP fraud
As for any investment:
Don't believe people who promote foolproof investment programs.
Be especially cautious if you are guaranteed high, risk-free returns.
Don't invest if you are asked to maintain secrecy. Take the time to check the information you've been given. Ask your registered representative for advice, request a prospectus, look for articles in specialized publications, etc.
Always check whether the person or company offering you an investment is registered with the AMF and therefore authorized to sell you this type of product. When in doubt, contact an agent at our Information Centre.
If you receive a suspicious offer or if you have been solicited by a company that is not registered with the AMF, we encourage you to report it.
If it's too good to be true, it probably is!