Fraud victim advocacy, fraud recoginition and prevention education, and law enforcement support

fraud recognition & prevention education, fraud victim advocacy, law enforcement support

Fraud recognition & prevention education, fraud victim advocacy, law enforcement support


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Fraud Secrets:

A Backstage Tour

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Why con artists scam

Profile of a con artist

What con artists look for

How con artists set up their victims

What a con artist won't tell you

What a con artist will tell you

Have I been scammed?

12 excuses for not returning your money

How do I find my money?

Where did my money go?

If you lost your funds in an investment scam, speak to your accountant about a theft deduction.


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Interest fraud: truth vs. scam

From The Dictionary of Financial Scam Terms

An easy-to-understand guide to financial terms used by swindlers


The fee charged for a loan.  The cost of borrowing money.  The money you receive if you invest in a stock, bond, or Treasury.  The money you receive when you make a loan.

For instance, banks pay interest on CD's (Certificates of Deposit) to attract investors.  The money deposited by the purchaser of the CD (the investor) is used by the bank to issue direct loans and to make various loan investments.  

The interest the bank earns on its direct loans and other investments will enable them to pay the interest promised on the CD, on the promised due date (maturity).  

In other words, the interest the CD holder receives is the bank's payment for the use of the deposited funds.  

The same goes for Treasury Bills and Bonds, or any financial instrument that carries a sum of interest at maturity.

The Scam:  Think of financial instruments as Promissory Notes.  Party A promises to pay Party B such and such an amount on such and such a date, plus interest.  (NOTE: not all financial instruments are interest-bearing).

Financial swindlers would like you to believe that you can earn say, 300% within a given period of weeks - anywhere from a month to a year.

In order for that kind of percentage to be feasible, figure out how much interest would have to be charged on the financial instruments involved.  Oh yeah - and let's not forget the percentage that is supposed to be allocated to the swindler-side.

Let's cut to the chase - a mortgage is a financial instrument, a Promissory Note stating that you promise to repay the bank for the money they forked over to the original owner of the house in which you now live.  For the privilege of using their money to get your house, you are going to pay the bank a fee - interest.

Can you imagine a scenario in which you would have to pay 300% on that loan, that mortgage?  I think not.

It' no different for any other financial instrument.  Period.


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