ASIC: Beware of imposter bond scams

The Australian Securities and Commodities Commission (ASIC) is warning investors of a rise in imposter bond investment offers. Scammers pretend to be associated with well-known domestic and international financial service firms and offer high yield bond investments to investors. ASIC recently became aware of two such scam operations targeting investors in Australia and others in countries such as the UK.

In many circumstances, the scam occurred after the investor completed an online enquiry form expressing interest in receiving investment advice, often via a third party or comparison site.

Some of the common tactics deployed by scammers include sending professional looking fake prospectuses with unrealistically high returns, falsely stating the bonds are issued by prominent financial services firms, falsely claiming investor funds will be pooled to invest in government bonds or the bonds of companies with AAA credit ratings, falsely claiming the purchase price of the bonds is protected under the Commonwealth Governments Financial Claims Scheme, and using contact details gathered online through fake investment comparison websites to call people and pressure them to invest or risk ‘missing out’.

When individuals decide to invest in these bogus bonds, they are directed to pay funds into a bank account. It can be difficult to recover money lost to scams, especially if the scammers are based outside of Australia, and the funds may be permanently lost.