The corporate regulator has issued a warning to investors about imposter bond scams, revealing it has uncovered two such scammers pretending to be associated with well-known domestic and global financial services firms and offering high-yield bond investments in Australia and the UK.

“In many circumstances, the scam occurs after the investor completes an online enquiry form expressing interest in receiving investment advice, often via a third party or comparison site,” ASIC advised.

Some of the characteristics of the scammers, ASIC explained, include “professional looking” fake prospectuses with unrealistic returns and false associations with well-known firms. The scammers also falsely claim the investments are protected under the Commonwealth Government’s Financial Grants Scheme, and gather details on investors using fake investment comparison websites.

“When individuals decide to invest in these bogus bonds, they are directed to pay funds into a bank account,” the regulator stated. “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.”

According to ASIC acting chair Karen Chester, investors should be wary of anything that sounds too good to be true.

“Interest rates globally are currently extremely low, and expected to remain so for some time. If you see or receive offers of high yield bonds, they are either high-risk or they may simply be bogus and a scam,” Chester warned. “Any prospectus offering incredible returns in the today’s economic environment is likely to be just that: incredible.”

ASIC has advised anyone concerned about fake bond investments to check ASIC’s Offer Notice Board, its register of AFSLs, its MoneySmart website and the main website or homepage of the issuer to see if there are any alerts about imposter scams. Failing that, ASIC states, seek independent financial advice.

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at [email protected]
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