26 September 2023

Investors warned to beware fake opportunities

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The Australian Competition and Consumer Commission (ACCC) is urging the community to be very cautious when presented with opportunities to make money from investments following an “alarming” increase in imposter bond scams in recent months.

Issuing the warning, Deputy Chair of the ACCC, Delia Rickard said financial losses to imposter bond investment scams had nearly tripled in the first half of this year, with more than $20 million lost by consumers to the sophisticated scams.

“Imposter bond scams usually impersonate real financial companies or banks and claim to offer Government/Treasury bonds or fixed term deposits,” Ms Rickard said.

“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,” she said.

“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.”

Ms Rickard said people looking to invest in bonds were falling victim to the scams after searching online for investment opportunities

She said this was often after they completed 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,” she 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.”

The Deputy Chair said it was critical to independently verify the financial institution or bank issuing the bonds by calling the bank or financial service directly, using details that consumers had sourced themselves – rather than using any phone numbers or links provided.

Ms Rickard advised people to always have an accredited financial or legal advisor check potential investment opportunities before they send money or provide their credit card details and “only ever invest as much as you can afford to lose.”

“Bonds can be purchased via the ASX,” she said.

“If you are thinking about doing this, follow the Australian Securities and Investments Commission’s safety advice.”

The Commission’s safety advice can be accessed at this PS News link.

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