By Masatsugu Horie - Oct 25, 2010 9:38 PM CT
Japanese consumers are being warned about an investment scam promoting the purchase of the Iraqi dinar on predictions the currency will surge in value as U.S. combat troops withdraw from the country.
A man in western Japan spent 2 million yen ($25,000) to buy 500,000 Iraqi dinar ($428) after a caller recommended buying the currency because it was expected to gain as much as 30-fold, the National Consumer Affairs Center said on its website. The man, whose attempts to get a refund were unsuccessful, was among more than 200 people who bought the currency, the posting said.
“In most cases, the exchange rate is extremely bad,” Ryota Kato, a spokesman for the center, said yesterday by telephone. “And you wouldn’t be able to exchange the dinar back into yen because currently no Japanese bank will accept it.”
The Central Bank of Iraq exchanges 1,170 dinar for 1 U.S. dollar, according to its website, a rate that has been in place since early 2009. An Iraq government spokesman said in April the country has no plans to stop linking its currency to the dollar.
Kato said the center received 368 inquires about Iraqi dinar in the nine months ended September, compared with four for all of last year. Among the 202 people who said they purchased the currency, the average investment was 3.5 million yen.
“One person spent 20 million yen buying dinar,” said Kato, adding that the elderly have been targeted. Consumers are also advised to take precautions if asked to buy the Sudanese pound, he said.
“Our organization can’t judge whether these transactions are fraudulent, but you should be very careful when you deal with currencies that have low liquidity,” Kato said. “We’re still getting many inquiries.”
To contact the reporter on this story: Masatsugu Horie in Osaka at email@example.com