ASIC has seen a rise in sophisticated bond investment scams, with criminals using “professional looking” fake prospectuses with unrealistically high returns to lure their victims. The scammers falsely state that the bonds are issued by “prominent financial services firms” before directing their targets to pay funds into a bank account – resulting in the funds potentially being permanently lost.
“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,” said ASIC acting chair Karen Chester.
“Investors searching for income-generating investments are at risk of being duped into buying these imposter bonds. Any prospectus offering incredible returns in the today’s economic environment is likely to be just that: incredible. ASIC warns investors to be sceptical and make proper inquiries before investing.”
Ms Chester warned that the scams were raising “not thousands, but millions of dollars” and that it had become aware of two such operations targeting investors in Australia, as well as others in countries such as the UK.
“Ensuring investment products are true-to-label is front and centre for ASIC. While ‘true to label’ covers all aspects of the investment product being offered, the foundation stone is basic truthfulness, and none more so than that the product issuer is actually who they say they are. This conduct is beyond not being true-to-label; it’s bogus-to-label,” Ms Chester said.
IFM Investors recently warned that an imposter group was attempting to gather personal information from the public by soliciting interest in a bogus “high yield fixed rate corporate bond”. The incident was reported to the Australian Cyber Security Centre.
