It is a pretty well established fact that if someone offers you a financial deal that seems too good to be true, then it probably is.

Two recent financial scandals in the Netherlands have proved just that. First there was the share lease scheme in which investors borrowed money to buy shares on the undertaking they would pay the loans back from the profits made when the shares were sold.
A lot of people signed up for these schemes because they thought they could make money out of nothing. And a lot of people were left seriously out of pocket when shares went down rather than up. In the end, the government stepped in to force a compensation deal.
Now there is a similar row over the extortionate charges which insurance companies have levied on investment-based savings premiums. Investors were lured in with talk of very healthy returns.
Again, work is under way to work out a compensation deal for people who were – frankly – stupid not to read the small print properly.
But then, even financial services institutions have been caught out in the hope of making a quick buck – by buying and selling investment products based on American sub-prime mortgages.
But unlike human beings, the big banks do not have the excuse of being inexperienced and failing to realise the risks.