Common Words and Phrases Used in HYIP Fraud Schemes

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Rat River Trapper

Common Words and Phrases Used in HYIP Fraud Schemes

Post by Rat River Trapper »

Fraudsters quite often take advantage of their victims' lack of familiarity with domestic and international banking procedures by using technical terms or concepts that appear to be legitimate. In some instances, these terms and concepts do bear some some resemblance to current banking practices, and are intended to make the fraudster's investment programme appear valid. Avoid becoming a victim by learning to recognize the lingua franca of High Yield Investment Programmes:

"Prime Bank" This term has NO legitimate use in the banking world, and is often used by fraudsters to refer to a small group of the "creme de la creme" of banks. For example, a fraudster will refer to a "prime bank" as one of the top 10 banks in the world. This term is to assure victims that they will be dealing with highly stable and well secured financial institutions, that set standards for international banking and for the financial community. There are NO "prime banks" and no financial institution would hope to be considered a "prime bank" due to the term's sordid history.

"Conditional SWIFT" wire transfers: The Society for Worldwide International Financial Transactions (http://www.swift.com) is an international association owned by its bank members, and facilitates the secure transfer of money worldwide amongst its members. Many HYIP schemes utilize the term "Conditional SWIFT" to guarantee that some condition will be fulfilled, which then triggers the transfer of funds to a beneficiary or beneficiary bank. For example, a victim may be told that he or she can purchase a discounted "prime bank" note which, when it becomes due, will trigger the full face value of the note via "Conditional SWIFT". "Conditional SWIFT" transfers simply do not exist in legitimate financial transactions.

"Key Tested Telex" or "KTT" Legitimate wire transfer messages contain security features, usually based on logarithmic formulae, that insure the authenticity of the message, in addition other encryption methods if sent via the Internet. When the TELEX system was first implemented, text messages were transferred via telephone lines, and every teleprinter connected to the system had a keyboard (keys) for message input, and a TEST key used to test the machine. No banker would recognize the term "Key Tested Telex" as a means of transfering funds electronically. With the advent of the Internet, the TELEX system for the most part is long obsolete. Use of this term in connection with an investment programme should be an immediate red flag.

"Blocked Funds" This term is used by fraudsters to infer to the victim that his/her funds will be protected by a bank or some other financial institution which will issue a "Blocked Funds Letter". Once "blocked", the funds are allegedly held apart from other funds on deposit, or in trust, and will only be released under certain conditions. While financial institutions can legitimately block funds due to government regulations, currency controls, or court orders, the generally do not block funds for commercial transactions, and certainly not for individuals.

"International Banking Day" This term has no meaning and is an abstract concept that is unknown in legitimate international banking, and is used only in HYIP schemes. A common variation is the phrase "one year and one day" to describe the availability or term of a financial instrument. No financial institution uses this term in connection with legitimate transactions.

"Non-Disclosure" or "Non-Circumvention" clauses These clauses are commonly contained in HYIP investment contracts and are used as a means to induce victims to keep silent about their dealings for fear of losing their investment, or facing litigation. Fraudsters often hide behind these clauses to deny involvement in the schemes if the authorities begin asking questions.

"Good, Clean, Clear Funds of Non-Criminal Origin" Since it is illegal to use funds of criminal origin, one would expect that the funds involved were not the proceeds of criminal activity. This declaration is of little use and is not used in legitimate financial transactions.

References to Secret World Banking Organizations Some HYIP schemes refer to organizations or persons that do not exist in the legitimate financial world. For example, there are no "Grand Masters" or "Prime Bank Traders" who oversee some vast, secret secondary financial market which is accessible only to a privileged few. (Note: Fraudsters will certainly be happy to add you to that privileged class for the opportunity to defraud you of your money.)