‘Fraudsters flourish during tough economy’

Caribbean citizens are being urged to stay vigilant against fraudulent investment schemes that promise quick cash but deliver financial ruin.

That was the clear message from Tyrone Lowe, director of the 36th Annual Sales Congress of the Barbados Association of Insurance and Financial Advisors (BARAIFA), as he addressed reporters during the second day of the conference at Wyndham Grand Barbados.

Lowe noted that people in the region want better returns on their savings amid tough economic conditions, but he warned that that growing appetite for higher investment returns is being exploited by opportunistic fraudsters.

He cited the recent failure of an unregulated financial scheme in Barbados and other Caribbean islands as a reminder of the fragile investment climate.

“There seems to be a desire for people to have investment,” Lowe said. “They want more.”

Traditionally, Lowe said, people relied on their banking institution and credit union for investments. However, “the banks don’t pay too much in savings.”

Both the banks and credit unions are stable, conservative, and well-regulated entities, he noted.

“On the other hand, we have others who have quick schemes where you are promised a high percentage increase. If you’re going to have quick returns, you’re going to have high risk, and I believe fresh in the minister’s minds are some financial failures that we had in Barbados over the last maybe 9-10 years. So don’t rush after anything that looks like it is going to be too risky. We know you want to grow, we know you want the investment climate to be sophisticated, but you’ve got to be careful of quick-fix schemes,” he said.

Lowe added that, over the years, Barbados has experienced multiple financial failures—both in the regulated and unregulated space—but the Government had made strides in regulation. Nevertheless, he said, there remained an urgent need for the population to be financially literate.

“It is a known fact that in hard economic times impostors turn up looking to see how best they can get the most out of you. Sadly, I’m not quite sure if we have got it under control in the way we want to. I think there was one that recently failed in the last two to three months; we haven’t heard how that is progressing. But if the Government has no regulatory framework for it, it becomes difficult to police and with each person that gets burned, it impacts the investment climate and confidence. So it is urgent.”

(SB)