GUERNSEY’S finance regulator is cracking down on fraudsters based outside the island but trading on its reputation. Investors from around the world are increasingly being conned into making deposits with bogus banks that claim to be based and/or licensed in Guernsey when they are not.
As well as losing money, victims also run the risk of passing on personal details which can be further misused.
The Guernsey Financial Services Commission is aware of 16 Internet sites with bogus banks claiming to be based in Guernsey.
Director of fiduciary services Stephen Trevor said that the regulator had no jurisdiction over people not based in Guernsey, but added that the commission was taking a tough line by regularly seeking out such sites and alerting the public to their presence.
‘I would say we are successful in the sense that we regularly search for bogus websites and, when we find them, we put information in the public domain,’ said Mr Trevor.
‘This enables potential investors who do their research to identify that the commission considers a certain website to be fraudulent.
‘We have been successful in advising potential victims who have been in touch and managed to prevent them from incurring losses.’
Mr Trevor said that over the last three years, there had been an increase in fraudsters setting up bogus bank websites.
These look like a genuine bank and claim to have a connection to a reputable jurisdiction such as Guernsey, Jersey or the Isle of Man.
Victims are referred to the sites by the fraudsters who say they are independent of the bogus bank. Investors are encouraged to open accounts with a promise that they will receive all, or a percentage, of a large sum of money.
The bogus bank asks for an initial deposit and, after paying, that is the last the victim will see of it.
One such example is Custodian Financial Trust, at www.cftrust.com, which gives an address of 812, La Fosse, St Martin.
‘It is generally believed that these types of schemes are run by Nigerian fraud gangs,’ said assistant director of fiduciary services and enforcement Kevin Brown.
‘The bogus bank schemes themselves are a sophisticated development of the Nigerian 419 letters that have been in wide circulation for years.’
Mr Brown said that in some ways it was a compliment to Guernsey that it was named because it showed the jurisdiction was reputable, but the commission has been taking action to reduce the threat to potential investors and to protect Guernsey’s name and reputation.
‘What we can do is, primarily via our website, make information available so that people can steer clear of bogus banks and other scams.
‘We can also alert Internet service providers to the fact that certain websites are clearly fraudulent and are, as such, abusing ISP services.
‘This can result in them being closed down by the ISP.’
Mr Brown said it was important that customers were alert to the possible fraud dangers on the Internet and that they researched where they made their investments.
He added that local bank licensees sometimes referred matters to the commission when a dubious website was spotted or a client made an unusual payment request.
Mr Brown said that victims of the scams had been in touch with the commission and did not have any complaints about the island.
Article posted on 18th August, 2004 - 12.00am
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