ASIC sounds warning around high-yield bond scams
The corporate regulator has warned of a rise in scammers targeting Australian investors by pretending to be associated with well-known domestic and international financial service firms.
The high-yield bond scams usually occur after an investor completes an online enquiry form expressing interest in receiving investment advice, often via a third party or comparison site.
Scammers pretend to be associated with well-known domestic and international financial service firms and send professional-looking fake prospectuses with unrealistically high returns.
ASIC also notes that other common tactics include falsely claiming investor funds will be pooled to invest in government bonds or the bonds of companies with AAA credit ratings, and falsely claiming the purchase price of the bonds is protected under the Commonwealth Governments Financial Claims Scheme.
ASIC acting chair Karen Chester has urged investors to be wary of claims that are “too good to be true”, noting that money lost to such scams are hard to retrieve, especially if scammers are based outside Australia.
“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,” Ms Chester said.
“Investors searching for income-generating investments are at risk of being duped into buying these imposter bonds. Any prospectus offering incredible returns in 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 has also urged Australian investors to be careful with sharing their personal information online.
“We remind investors to check that they are actually dealing with the company they think they are dealing with,” she said.
“Do not share personal information online unless you can verify who is using the information and how it will be used. We are seeing a rise in suspicious websites that are simply lead generators for scammers.
“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.”
Jotham Lian
29 January 2021
accountantsdaily.com.au
Latest Newsletters
Hot Issues
- Our investment and economic outlook, July 2024
- Striking a balance in the new financial year
- The five reasons why the $A is likely to rise further - if recession is avoided
- What super fund members should know when comparing returns
- Insurance inside super has tax advantages
- It’s never too early to start talking about aged care with clients
- Capacity doubts now more common
- Most Gold Medals in Summer Olympic Games (1896-2024)
- SMSF assets reach record levels amid share market rally
- Many Australians have a fear of running out
- How to get into the retirement comfort zone
- NALE bill passed by parliament
- Compliance focus impacts wind-ups
- LRBA interest rates increase for 2025
- Income-free areas set to increase from 1 July
- Most Spoken Languages in the World
- Middle-to-higher incomes boosting SMSF growth
- Investment and economic outlook, May 2024
- Transitioning into retirement: What you should know
- Plan now to take advantage of stage 3 tax cuts
- Deeming freeze a win for Age Pensioners
- Downsizer contributions can be time critical
- The superannuation changes from 1 July
- The Deadliest pandemics in History
- Winners & Losers
- Budget breakdown – Federal Government Analysis
- Federal Budget 2024
- Getting to a higher level of financial literacy in Australia
- What is the future of advice and how far off is superannuation 2.0?
- Investment and economic outlook, April 2024
- Australia’s debt service ratio ‘extraordinary’: CBA
- Connecting an adviser with your children
Article archive
- April - June 2024
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
January - March 2021 archive
- ATO’s good-faith approach to crypto won’t last much longer
- Navigating the post-pandemic challenges and pathways of super for young women
- ATO Small Business Newsroom
- Cost of retirement up in December quarter
- Why benchmarking will be good for super funds
- What exactly is inflation?
- The risks in hunting for higher returns
- Frydenberg flags super freeze
- The real value of advice
- Taking a deeper dive into indexation of the transfer balance cap
- ASIC sounds warning around high-yield bond scams
- How to pass the diversification test
- Rollout of Director ID Numbers (DIN) is ahead of schedule
- The perks of staying invested
- Retirees proceeding with downsizing plans as confidence rises
- Early access boosted interest in advice
- Vaccination rates as they happen around the world
- Approaching the dawn
- Videos and other resources for our clients
- Retirement the ‘number one trigger’ for financial advice
- ‘Unfinished superannuation business’ to watch for in 2021
- Superannuation ideas for 2021
- Retirees need new super investment approach
- Returning expats reminded on tax snares with pensions, investments