If You Get This Message from Your Bank, Contact Authorities, FBI Says
The scam could put your personal information and your money in jeopardy, experts warn.
Whether you find yourself suddenly dealing with a higher-than-expected utility bill or are struggling to save for a vacation, household repair, or your kids' college tuition, practically everyone would like to have a little more money in their bank account from time to time. And while the right savings accounts or investments may help your money grow over time, there's one financial offer you're better off avoiding entirely—even if it's being offered by your own bank.
Read on to discover which message from your bank could put your personal information and money into the wrong hands and what to do if you've been targeted.
If you're offered a prime bank guarantee, don't accept.
If you're offered a prime bank guarantee by someone claiming to be from your own banking institution or another well-known bank, never accept it under any circumstances.
Prime bank guarantees are investment schemes that promises to deliver a significant amount of money to those who invest. However, these supposedly bank-backed investments, also referred to as "roll promises," are actually scams perpetrated by fraudsters who take the money you've "invested" and provide you nothing in return.
"The purpose of these frauds is generally to encourage the victim to send money to a foreign bank, where it is eventually transferred to an off-shore account in the control of the con artist. From there, the victim's money is used for the perpetrator's personal expenses or is laundered in an effort to make it disappear," the FBI warns.
There is no such thing as a legitimate prime bank guarantee.
Even if you are asked to invest in a prime bank guarantee by someone who appears to be a genuine representative of a bank or other financial institution—or if you're contacted by someone you know about one of these investment schemes—don't fall for it.
"If someone approaches you about investing in a so-called 'Prime Bank' program, 'Prime World Bank' financial instrument, or similar high-yield security, you should know that these investments do not exist. They are all scams," the U.S. Securities and Exchange Commission (SEC) says.
Certain buzzwords can tip you off to the scam.
According to the SEC, many prime bank scammers will try to confuse their marks with complex terminology to convince them to sign.
The U.S. Treasury Department's TreasuryDirect program adds that specific buzzwords may indicate that the offer you're being made isn't legitimate. In addition to the words "prime bank" or "roll program," scammers will also refer to "secret trading rooms," "non-circumvention agreements," "blocked funds investment programs," "irrevocable pay orders," "intermediate bank notes," "fresh-cut paper," "mandated agents," "foreign bank advice," and other terminology. While some of the aforementioned terms may be used in legitimate banking transactions, if they're mentioned in the context of a secretive investment opportunity, they may indicate that the deal is fake.
TreasuryDirect also notes that if you're asked by someone claiming to be a financial advisor or bank representative to have your bank write a "blocked funds letter" noting that you have money available that is "clean, and of non-criminal origin," and free of "liens or encumbrances," it is likely a fraud. "These letters have no use in legitimate banking circles," TreasuryDirect warns.
If a scammer has reached out to you, contact authorities.
In addition to reporting the fraud to your local police department, contacting authorities can help ensure that other people don't fall prey to one of these scams.
The SEC recommends contacting your state regulator regarding any prime banking scams. If you've already paid money into a prime banking scam, you can also report the fraud to your bank or credit card company, who may be able to reverse the charges.