AFCA members should be aware of a recent increase in imposter bond investment offers targeting local investors.

ASIC has advised firms to be vigilant of scams which involve individuals pretending to be associated with well-known domestic and international firms, such as financial service providers, and offering high yield bond investments to investors.
 
Common tactics deployed by scammers include:

• sending professional looking fake prospectuses with unrealistically high returns
• falsely stating the bonds are issued by prominent firms when this is not true and there is no underlying investment
• 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
• 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.

ASIC has provided more information here and here.  

Potential scams should be reported to ASIC, and to the Australian Cyber Security Centre.