Financial Scams in Colombia in 2022
So, you want to know the most common financial scams in Colombia that foreigners should be aware of. A lot of foreigners travel to Colombia to enjoy their vacation, meeting and be with their significant other, purchasing property, retiring in some quaint town, or starting a local business. While Colombia is a largely safe place to live, invest, and retire, you still have to be cautious of the locals when it comes to making legal and financial transactions with them.
Financial scams and abuse of confidence or trust by spouses or girlfriends are common in Colombia just like the rest of the world. Several foreigners have become victims of financial scams during their stay in Colombia.
These scams can include real estate scams, credit card or wire fraud, business or corporate fraud, fake local currency, and fraudulent bank accounts. In this article, we will discuss the five most commons financial scams in Colombia and how you can avoid being a victim of fraudulent practice.
1. Financial Scam by a Colombian Spouse
The most common financial scam in Colombia is being defrauded by your loving Colombian spouse or girlfriend or boyfriend. Often, your spouse or significant other will carry out a financial scam while colluding with his or her family members.
Your Colombian spouse, boyfriend, or girlfriend can take advantage of you knowing that you are not well versed in local laws while your grasp of the Spanish language is elementary at best.
It is quite common for foreigners to give money to their Colombian girlfriends to help him or her or their family members with medical expenses, rent, or tuition. But unfortunately, that money gets spent on other activities such as paying for plastic surgery, debts owed to friends or family members, or even spent on a vacation that he or she took without informing you.
Often family members of your Colombian spouse will approach you with a business idea and will ask you to invest in their business venture. You may be taking a big risk, not in terms of investing money in a business but thinking that it is an investment. Often it is not an investment but rather a donation. You should not expect to get your money back even if the business shows any sign of success.
Furthermore, some foreigners are too quick to hand over their credit cards to their Colombian boyfriends or girlfriends just to find out that the card has been maxed out while the money was sent by their Colombian girlfriend to her ex-husband or boyfriend or a family member.
Some foreigners make the mistake of giving keys to their apartments or homes to their girlfriends in Colombia later to find out that all the furniture and the appliances have been removed from their homes in their absence.
To avoid these scams, you must first trust your instincts and be careful of claims and complaints made by your Colombian spouse. If you sense that something is not right or something is off, then avoid that financial transaction with your Colombian spouse altogether.
2. Abuse of Power of Attorney for Home Purchase
Abuse of Power of Attorney
When the power of attorneys is very general and not specific, this gives the power to the opportunistic person to sign a property over to other persons, change prices, or even reroute payments to themselves or unknown third parties.
One example of out of many, a woman with a power of attorney for someone she was romantically involved with purchased a home and put the home in her name, which was not the agreement. Luckily, the person who sent the money had many conversations which established how the purchase was supposed to be conducted. A judge later forced the liquidation of the home and the US citizen was rewarded money from the sale a few years later.
Another example all too common is a girlfriend or wife asking for money to make property payments for a future or current home. Foreigners often trust their Colombian lover to faithfully make investments with the pretense of buildings a future together.
The reality is that many times the money is not being invested, and is being used to pay for a lavish lifestyle in Colombia, or money is being invested in one person’s name and once the couple ends the relationship the foreigner is left with nothing.
Unfortunately, open-hearted or overly nice persons are always get preyed upon by unscrupulous people in Colombia.
3. Credit Card and Wire Fraud:
Credit, debit card scam and wire fraud is all too common in Colombia and happens quite a lot in big cities. Card numbers and pins are stolen during swipe at local stores, gas stations, and thrift shops. Later these are duplicated as cards and are used in brick and mortar stores or on online retail channels.
It is quite common to get your credit card stolen electronically in Colombia while making a transaction. Some foreigners have reported that their credit card was stolen after they make travel-related purchases while using a travel agency.
Besides credit card fraud, wire fraud is common in Colombia. In one case, an employee at a legal firm tried to get the client to wire money to his account for business services rendered by his employer.
4. Corporate Fraud
This type of fraud or scam often involves legal representatives of companies such as a president, vice president, or manager.
Putting someone on corporate paperwork as a legal representative, i.e., president, vice president, or administrator can often be too much for someone to resist in Colombia. Even though you promise profit sharing, great salary, and benefits, many people think about what they can get short-term, unfortunately.
In certain sectors of the economy, you are going to run into more types of persons who will scam you, such as casinos, gold exporting or mining, agricultural, webcams, night clubs, thrift shops, and restaurants.
Hence, it is common to mislead foreigners who do not know about the country. Be suspicious when friends are not wanting to use an attorney. Keep proof of conversations by email, text, and even voice calls.
5. Fake Currency Bills:
A lot of fake currency bills are in circulation in Colombia. You are most likely going to find fake currency bills while dealing with street vendors and taxi cab drivers.
During the exchange with a taxi driver or a street vendor, pay attention to the currency bills that a driver or vendor hands to you. The currency bills can be fake and are quite hard to recognize especially if you are taking a cab at night.
Be especially careful when handling a large bill such as a COP 50,000 note to a cab driver and he returns the note saying, that he does not have any change. Upon your insistence, he magically finds change and hands it to you with the COP 50,000 bill. The next day you try to pay with that same COP 50,000 currency note that the cab driver or a street vendor gave back to you, and you’re told it is fake.