The first kind of investment bond scam is an imposter. It targets investors who have lost money in an investment and contact them with an offer to recover their losses. To get the investor to invest in the company, the scammer will require a “refundable” fee, a deposit, taxes and additional funds. In many cases, the investment scammer will set up a makeshift office. But, be careful! Some of them may have a respectable business name, a toll-free phone number, and an office address.
Another kind of investment bond scam is an advance fee scam. This scam takes advantage of an investor’s hope to reverse a bad investment. Usually, the scam artist will offer an investor a “guaranteed” investment opportunity that isn’t really there. But, there are many ways to spot an advance fee fraud. In one of these situations, the scammer will offer the investor a note that is worthless but promises a significant return on the money.
Another kind of investment bond scam uses the humanitarian and infrastructure development themes to trick people into thinking that the trading program is real and that the investor is helping a Third-world country by investing in it. Historical bond trading programs are also popular with unsuspecting investors. These programs use historic bond prices and supposedly issue “debentures” or “medium-term notes” issued by top European banks. However, leading European banks have denied participating in such programs. The instruments are not as liquid as they claim to be.