Sydney woman loses $75,000 after buying fake government bonds

its government bonds are considered one of the safest investments out there, but one Sydney woman says her attempts to create a retirement nest egg with them ended in a nightmare.

For 61-year-old mother Paula*, it all started in September when she started looking at government bonds online.

“With the cost of living rising, I thought anything I can do to earn some extra cash would help,” she said.

A fake digital bond certificate that the scammer sent Paula. (Delivered)

Government bonds are a way for investors to lend money to the government, usually at a slightly higher interest rate than a term deposit with a bank would offer.

Interest is paid at regular intervals until the bonds mature and the initial investment is repaid.

Eager to get started, Paula searched online and clicked on a link to what appeared to be a Commonwealth Bank ad selling government bonds.

Paula filled out an application form with her details and waited for someone to contact her with more information.

Not long after, a man claiming to be a Commonwealth Bank account manager called Paula.

“He said, ‘My name is Tom Harrison, I’m from the Commonwealth Bank and this conversation is being recorded,'” Paula said.

“He sounded very convincing and official.

“I immediately believed him – and that got me in trouble. I went along with it and it turned into a nightmare.”

At Paula’s request, the man sent her some more information about the government bonds via email.

All documents had prominent Commonwealth Bank branding.

The interest rate offered was 5.5 percent, which was a percent or two higher than what Paula had seen elsewhere.

Paula decided to use $75,000 of her savings – which she had in a Qudos bank account – to buy the bonds.

An email from the scammer, who identified himself as a Commonwealth Bank executive.
An email from the scammer, who identified himself as a Commonwealth Bank executive. (Delivered)

She said she initially transferred $1,000 to the account the man nominated as a way to test whether she had the correct account number.

“It went through, but then the guy said to me, ‘I’m going to have to refund you that $1000 because the process is we have to do (the purchasing) in bulk,'” Paula said.

“I think this was a strategy to make me trust him more, and it worked, because what kind of scammer would pay money back?”

Paula then transferred the $75,000 in three installments and received a digital certificate confirming her purchase.

It wasn’t until a week later, when Paula happened to see an email from Macquarie Bank warning customers about government bond scams, that she began to suspect something was wrong.

“This is what caused everything, I was like ‘Oh no,'” she said.

Paula said she tried calling “Tom Harrison” but couldn’t get through to him, so she went straight to the Commonwealth Bank where a cashier confirmed it was a scam.

“It was just awful,” she said.

Looking back, Paula said there were red flags she couldn’t believe she missed, such as the scammer’s email coming from a slightly different address than the one used by Commonwealth Bank employees.

“I know it’s my fault. When I looked at the paperwork, it seemed real to me at the time, but now I see the fakeness in it.”

A Commonwealth Bank spokesman also confirmed that the bank does not directly sell government bonds listed on the Australian Stock Exchange (ASX).

Instead, government bonds are sold through the bank’s online brokerage firm, CommSec.

“We are aware of sophisticated bond scams masquerading as CBA or other organizations, and we regularly work with industry partners to combat them,” said the bank’s spokesman.

“If anyone believes they have been scammed, they should contact their bank immediately.”

A spokesperson for Qudos Bank said it is investigating Paula’s case and cannot comment on the matter.

Red flags aside, Paula is among an increasing number of Australians who have fallen victim to sophisticated investment bond scams.

Aussies have lost $33.8 million to investment bond scams so far this year, according to Scamwatch from the Australian Competition and Consumer Commission (ACCC).

This is more than double the losses for all of 2021.

Scamwatch received more than 400 reports of fraudulent bond scams between January 1 and November 20 this year, but the true figure is likely much higher, as research shows that only about 13 percent of scam victims report their losses.

Earlier this year, ACCC vice president Delia Rickard described the increase in bond investment scams as “alarming.”

“As interest rates rise, people who want to invest in bonds fall victim to this scam after looking online for investment opportunities. This often happens after filling out forms on fake third-party comparison websites,” said Rickard.

“These comparison sites can be very persuasive and people pass on their details under the impression that these are legitimate Australian sites comparing genuine financial services.

“Convinced they are making a legitimate long-term investment, it is common for victims to deposit larger amounts upfront and not check their account for months before realizing they have been scammed.”

Since many victims were contacted by phone, Rickard said an important way to avoid scams was to call a bank or financial service directly using self-obtained details — rather than using phone numbers or links provided.

“Bonds can be bought through the ASX. If you are thinking of doing this, follow along ASIC’s security advice,’ Richard said.

Banks also played an important role in preventing scams, Rickard said.

“Organizations should actively monitor, alert and immediately seek the removal of websites impersonating their brand,” said Rickard.

*Name has been changed.

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