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Romanian Investment Boom Attracts New Fraudsters

Posted On   date21/12/2013

Romanian Investment Boom Attracts New Fraudsters

Romania has managed to attract an impressive flow of investors into the country, as economic conditions and barriers to entry improve.  But, that’s not to say investing in Romania is simple and straightforward.  Far from it.  The Romanian economy is showing several signs of improvement: it has the third fastest economic growth in the European Union, an unemployment rate lower than in the rest of Europe, low inflation and a moderate budget deficit. The government has been working hard in promoting foreign direct investment. All these factors speak to the country´s growth and why it is now on investors’ radar.

What is keeping some of the investors out of Romania’s economy and burning others who do?  Most of the foreigners putting money into Romania and Eastern Europe in general fail to do their homework.  What may look good on paper, may not be good on the ground in Bucharest or elsewhere in Romania.  False and fraudulent business are plenty, and scammers, hackers and criminals committing fraud are still all too common.  Positive cash flows and registered businesses abound, but how do you know they are truly reputable and legal?  Romania is working hard to improve its image to the world, and gain the trust of companies and individuals seeking to invest overseas.

It is necessary to prove the country’s trustworthiness to the world before foreign investors can move in with relative safety.  As the situation stands now, the risk is high (although so is the potential reward).  Investigators in Bucharest urge investors do move slowly, do their homework and get multiple references before moving forward in any deal.  Consider a professional and comprehensive due diligence service prior to releasing and sensitive company data or payment.  Letting a criminal or hacker into your company can be costly.

Among the most common fraud types impacting investors in Romania are false companies, shell companies, companies that exist on paper but have no physical operation or reputation, professional looking websites with no actual business, hacking cases and complex internet fraud, dating scams that actually take on a form of investment, and theft of documents and data, and identity theft.

Fraudsters often lure businessmen into investing in gold, retail trade, telecommunications, natural resources and gas industry.  In many cases, criminals create elaborate scams and even meet in person with their victims, and may even rent an office to appear legitimate!  The whole deal can be a scam, so know the risk and take proper precautions.  In other cases, internet criminals will assume the identity of a real and reputable company, so when managers try to verify the company or person, everything appears clean.  What victims don’t know in these cases is that the criminal is simply assuming the identity of an actual person or company, to gain your trust and steal your money.  Romanian scams are increasingly complex, and if you don’t speak the language, chances are you’re about to enter a high risk game.

Professional private investigators can verify if the business is legal and registered, investigate the operations and reputation, verify address and number of employees, conduct an asset search as needed, and make sure your contact is who he or she claims to be.

Make no mistake, Romanian is now open for business.  Be safe, and verify.

C. Wright
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