LONDON ("LOCO") GOLD

How does the scam work?

A front company is formed by the culprits who will then advertise a vacancy within the company for an unskilled post paying a high salary. Having worked for the company for a short while, the victim is shown how easy it is to profit from speculation in gold futures and investments by the culprits. He or she then agrees to transfer funds into the company account so that the culprits may trade on their behalf.

In addition to depositing the cash, the victim is usually required to sign legally biding documents which he or she does not fully understand and that effectively absolve the company from any liability should the investment crash. Needless to say the investment does crash, and in many cases the victims not only loose the money invested, but in addition find themselves having to repay unseen charges to the culprits.

Who are the scammers?

As with those who perpetrate the Modeling Agency scams, they can come in any shape or form. They will however seek to make the con appear more convincing by outward displays of wealth.

What is our advice?

• Beware of unskilled positions being offered at unrealistically high remuneration.
• Do not transfer your own money to company accounts
• Be aware of the fact that many con artists use the name 'Loco London' to cheat you into believing that you are dealing with legitimate operators.
• Work only with legitimate organizations that can prove their access to the Loco London market with the proper certificate
• Look to reputable banking institutions as an alternative conduit for investment in the gold market
• Beware of an increase in the number of these scams as a result of the economic downturn
• Be aware of the fact that gold prices might surpass the $320 mark to reach $360 an ounce once the US dollar or US capital markets reach their peaks, which might trigger a rush by investment funds into gold. Again this may prompt and increase in activity by bogus traders