Losses to imposter bond investment scams have nearly tripled in the first half of this year with consumers losing over $20 million to these sophisticated scams.
Imposter bond scams usually impersonate real financial companies or banks and claim to offer government/Treasury bonds or fixed term deposits.
People often fall victim to them after searching online for investment opportunities and completing enquiry forms via fake third-party comparison sites.
The latest Scamwatch data reveals there were 228 reports of imposter bond scams between January and June, compared with 82 reports in the first half of last year.
Losses suffered by Australian victims of imposter bond scams increased by 265 per cent in the first half of the year, compared to the same period last year. However, the true losses to these scams are likely to be much higher, as research shows that only around 13 per cent of scam victims report their losses to Scamwatch.
“We are seeing an alarming increase in imposter bond scams, so we are urging Australians to be very cautious when presented with investment opportunities,” ACCC Deputy Chair Delia Rickard said.
“As interest rates rise, people looking to invest in bonds are falling victim to these scams after searching online for investment opportunities. This is often after they complete enquiry forms on fake third-party comparison websites.”
“These comparison sites can appear very convincing, and people are providing their details under the impression that these are legitimate Australian sites comparing real financial services,” Ms Rickard said.
“Convinced they are making a long-term, legitimate investment, it’s common for victims to deposit larger sums upfront and not check their account for months before realising they were scammed.”
More than half of those who reported losses to imposter bond scams were first contacted by phone, accounting for $11 million in losses.
“It’s critical to independently verify the financial institution or bank issuing the bonds by calling the bank or financial service directly, using details you have sourced yourself - rather than using any phone numbers or links provided. If you seem to have been dealing with someone from the institution ask to speak to them.” Ms Rickard said.
“Always have an accredited financial or legal advisor check any potential investment opportunity before you send any money or provide your credit card details and only ever invest as much as you can afford to lose.”
“Bonds can be purchased via the ASX. If you are thinking about doing this, follow ASIC’s safety advice,” Ms Rickard said.
“Investment opportunities that promise a high return with little to no risk are likely to be a scam.”
Victims of imposter bond scams are usually directed to transfer funds into a bank account, which are sometimes based in Australia.
“If you have reason to believe you have been scammed, contact your bank or financial institution as soon as possible as they may be able to find where the money went, block scam accounts and help others to avoid sending money to scammers,” Ms Rickard said.
If you have given away personal information, as most victims have, then also contact IDCARE as soon as possible.
Equally, organisations that are aware they are regularly targeted by scammers impersonating them, have an important role to play in the prevention of scams.
“Organisations should actively monitor for, warn about and promptly seek the removal of websites impersonating their brand,” Ms Rickard said.
More information about scams can be found in the ACCC’s latest Targeting Scams report.
The ACCC shares investment scam reports with ASIC. The ACCC also shares scam reports with the financial sector through the Australian Financial Crimes Exchange and with platforms such as Facebook. Telephone numbers used by scammers to contact victims are also shared with telecommunications providers for potential blocking under the Reducing Scam Calls Code.
The ACCC is monitoring initiatives overseas and advocating for more scam prevention measures in the financial system, including the UK’s requirements for Confirmation of Payee in the Authorised Push Payment Scams Contingent Reimbursement Model Code.
Before investing Australian investors can make these simple practical checks:
check ASIC’s Offer Notice Board to see if a prospectus relates to a recent offer registered;
check ASIC’s register of Australian financial services licensees to make sure any party promoting or issuing the financial product is licensed or is authorised by a licensee;
check ASIC’s Moneysmart list companies you should not deal with.