Three Scams

by | Apr 21, 2001 | Archives

I recently wrote about a reader who had been duped in a pure trust scam. Now it appears that they may also be caught up in a scam of another sort. Here is what I received. Read on because knowing about this could save you some big bucks!

Here is the message I received,

“Dear Gary,

I may be receiving a substantial loan from Germany, through a contact, through a friend who is handling arrangements. Low interest rates, long-term, flexible pay back. It has been on and off and held up for almost a year due to various conditions. The US governemnt will be taking 1/3 right off the top before it get’s here, with some sort of papers to be filed to get it returned to the recipient. According to the company representative, the paperwork is complete and notices via courier should be arriving in the next few weeks. Since this has been held up so much, I haven’t talked about it much with anyone. I thought you should know. “

There is some important information in my reply.

“Gosh I feel like a cad writing back to all your messages saying “be careful”. What you have written does not make sense to me. One of the scams I come across again and again are people offering loans with some special and unusual term. They often call them self liquidating loans. There are always endless delays (often the lender’s son is hurt at the last moment). At some stage money will be requested as a fee, bribe or something.

Questions I ask are #1: Why Germany lending to the U.S.? Usually the further away a borrower the less likely the repayment. #2: Why the delay. Most loans have a system and are quick to accept or reject if you provide the information. Usually in a scam some fee or some cousin of some official etc. has to be paid to get the thing done. Finally 33% off the top? That is crazy. How can a person hope to repay a loan if so much is taken out up front. This seems unrealistic and does not fit the norm. I am suspicious and ask you to beware. Don’t pay anyone if you already have not. If you have paid something, don’t pay more. If you can get full details, I’ll be able to give you a more accurate view.”

There are four types of scams I see most often. This is the first, an offer of a loan or some type of finance. I’ll write about the other three in my next message.

Until then, good investing!