Enticing opportunities...
or common scams?

  Some of the most common scams are:-

Advance-Fee scams:

  An advance fee scam is a scam following a very basic formula where you are asked to pay a fee of some kind to receive a product, but you never get the product.

  People with poor credit are often targeted. You are promised that you can get your loan after filling in the requisite paper work and paying your application fee. After paying your fee, you never hear from the lender again.

  The advance fee loan scam can take many forms, and often overlaps with multi-level marketing. Many of those "lose weight fast" or "make money fast" type ads you get in your mailbox are advance fee type common scams. When you call up for info you are asked to send a self-addressed stamped envelope with $10 or something similar so you can get your info pack. Sometimes the info pack arrives, sometimes it doesn't.

  Even sneakier are the scams where you phone a 0055 number costing four dollars a minute. The info line has someone s-l-o-w-l-y explaining to you about their little scheme. The real scheme is getting you on the phone to listen to their pre-recorded message.

  Other variations include letters from "solicitors" advising that you have just been left a large estate by some relative you never knew you had, but you must of course pay various fees in order to get your money.

  "Treasure hunting" is also a popular one, some wealthy sucker gets asked to finance a recovery operation to get back Spanish gold or Nazi loot, but instead the conmen just disappear with the money.

The Nigerian Scam:

  One of the most common scams is this one. It is a form of Advance-Fee scam. It has no end of variations.

  Claiming to be Nigerian officials, businesspeople or the surviving spouses of former government heads, con artists politely promise big profits in exchange for help to transfer millions of dollars into your bank account. The deal is often asked as a favour and is generally marked as urgent and confidential.

  You may receive "official looking" documents. Typically, you're then asked to provide blank letterhead and your bank account numbers, as well as some money to cover transaction and transfer costs and attorney's fees.

  You may even be encouraged to travel to Nigeria or a border country to complete the transaction. This can actually be a very dangerous practice. People have disappeared and even been killed. According to the Australian Institute of Criminology, since 1992 17 people have been killed in Nigeria attempting to recover their funds, and the U.S. State Department has documented over 100 cases where US nationals have had to be rescued from Nigeria.

  Sometimes, the fraudsters will produce trunks of dyed or stamped money to verify their claims. Inevitably, though, emergencies come up, delaying the "transfer" of funds to your account and requiring you to put up more and more of your money; of course, there aren't any profits for you to share, and the scam artist has vanished with your money.

Ponzi Schemes:

  A cousin of pyramid schemes, having a worthless product, or a fictitious product, These common scams lure investors in by offering big profits like 50% a month. Ponzi schemes pay out the first investors by taking money off new investors. Those who join in toward the end provide the capital for dividend payments for those who were in early. The whole process works until recruitment slows down, at which point the whole thing collapses.

  Such schemes have been around for centuries and used to be known as "bubbles". They are very effective common scams because they keep the first investors happy by actually paying as promised, hopefully generating plenty of glowing testimonials, so hopefully it takes a while for the late-comers to realise they've been done in.

Fast Wealth For Little Investment Scam:

  If it sounds too good to be true, then it probably is. Most common scams promise more than what investors are used to - fast profit, large profit, unique opportunity, exclusive opportunity. Don't let down your normal, protective safe-guards for the allure and romance of offshore investing. Claims of impossible or outrageous returns mean the likely loss of your investment. The more enticing the return, the more wary you should be.

  Avoid anything to do with prime bank notes or guarantees, the "world's top 100 banks", the roll program,etc. These all have the get-rich-quick allure, but they are usually simply more common scams and programs designed to rip you off.

The "Buy A Private Offshore Bank Scam":

  Offshore bank schemes are pushed on the claim that they give two main advantages: the first is privacy. The second is the ability of the offshore bank to accumulate (undistributed) profits without those profits being subject to tax in your own country. These common scams seek to make you feel justified in keeping your own money out of the hands of the taxman.

  Promoters say that a private bank is needed for marshaling assets for various ventures or pooling funds for investing. But, there are better and much less expensive vehicles for doing the same thing.   In most cases the sale of private banks to ordinary offshore investors is a consumer ripoff. So called "banking licenses" in obscure and untested jurisdictions are bought for around $2,500 each and then sold to unsuspecting offshore newbies for upwards of $70,000.

  These licenses often may not be assignable or transferable without the consent of the tax haven -- a minor fact often overlooked and not disclosed by the promoters. In many situations the promoter sells it and says "Good Bye!" to the customer leaving the buyers to fend for themselves.   In order to operate an offshore bank so as to qualify for the special status offered under both Canadian and US tax laws means actually operating a banking institution. Not many people could step into such a business and learn as they go.

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You are here:
Common scams - a description of the main types of scam commonly perpetrated offshore and onshore.

Offshore Scams and Rip-offs - an introduction to the biggest offshore investing danger.

Spotting a scam - How to spot a scam by recognizing the common traits of offshore scams.

Spotting a Scam Business - The features of businesses and organizations which are out to take your money while under the guise of a legitimate business operation.

Spotting a Con-artist - How to recognize the typical characteristics of the conman after your money.

Avoiding scams - How to go about avoiding being caught up in a scam onshore and offshore.

Reporting scams - Where to report scams and bodies that can be of assistance.

Information scams - a warning about a type of scam that targets small amounts from offshore information seekers.