This article is reproduced here without permission under the Fair Use Doctrine. It was originally published at http://www.consumerreports.org/cro/magazine-archive/march-2009/money/scams/uninsured-savings-accounts/scams-uninsured-savings-accounts.htm and is Copyright © 2004-2009 Consumers Union of U.S., Inc.
That high rate might be "guaranteed," but there's no federal guarantee backing the money you deposit. That's because the offer came from Millennium Bank in St. Vincent and the Grenadines, in the West Indies, and the bank is not FDIC-insured. Millennium says it is a wholly owned subsidiary of United Trust of Switzerland and devotes space on its Web site to describing Swiss banking. It notes that "the main reason for Swiss Banking is to keep one's financial status private, protecting personal assets along with receiving a higher return."
Millennium encourages customers to use its secure online banking services, but it says there is no Web site providing information about United Trust of Switzerland because its "premier private clients" don't trust the security of public Web sites.
We checked with the Swiss Federal Banking Commission, which says that United Trust is registered as a management-consulting firm and that neither it nor Millennium Bank is supervised by the commission. The International Financial Services Authority in St. Vincent confirms that Millennium is registered as an offshore bank operating on the island but would not comment further.
When we asked Millennium employee Bob Kelty how the bank invested depositors' money to achieve such high returns, he declined to explain, saying, "That's proprietary information."
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