It all started for 61-year-old mum Paula* back in September when she began looking into government investment bonds online.
“With the cost of living going up, I was thinking anything I can do to earn a little bit of extra money will help,” she said.
Government bonds are a way for investors to lend money to the government, usually at a slightly higher interest rate than a term deposit at a bank would offer.
The interest is paid at regular intervals until the bonds reach their maturity date and the initial investment is returned.
Eager to get started, Paula did a search online and clicked on a link for what appeared to be a Commonwealth Bank advertisement selling government Treasury bonds.
Paula filled out an enquiry form with her details and waited for someone to get back to her with more information.
Not long after, a man claiming to be a Commonwealth Bank account manager phoned Paula.
“He said, ‘My name is Tom Harrison, I’m from the Commonwealth Bank and this call is being recorded,'” Paula said.
“He sounded very convincing and official.
“Straight away, I believed him – and that’s what got me into 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 of the documents had prominent Commonwealth Bank branding.
The interest rate being offered was 5.5 per cent, which was a per cent or two higher than what Paula had seen offered elsewhere.
Paula decided to use $75,000 of her savings – which she had sitting in a Qudos Bank account – to buy the bonds.
She said she initially transferred $1000 to the account the man nominated as a way to test she had the right account number.
“It went through but then the man said to me, ‘I’ll 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 refund money?”
Paula then transferred the $75,000 over three instalments and was sent 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 triggered everything, I was thinking, ‘Oh no’,” she said.
Paula said she tried to call “Tom Harrison” but could not get through to him, so she went straight to the Commonwealth Bank, where a teller confirmed it was a scam.
“It was just terrible,” 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 to the one used by Commonwealth Bank employees.
“I know it’s my fault. When I looked at the paperwork, it looked genuine to me at the time, but now I can see the fakeness in it.”
A spokesperson for the Commonwealth Bank also confirmed 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 stockbroking subsidiary, CommSec.
“We’re aware of sophisticated bond scams that pretend to be CBA, or other organisations, and we regularly work with industry partners to combat them,” the bank’s spokesperson said.
“If someone thinks they have been scammed then they should contact their bank immediately.”
A spokesperson for Qudos Bank said it was investigating Paula’s case and could not comment on the matter.
Red flags aside, Paula is among an increasing number of Australians who have fallen victim to sophisticated investment bond scams.
According to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch, Aussies have lost $33.8 million so far this year to imposter investment bond scams.
This is more than double the losses for the whole of 2021.
Scamwatch received over 400 reports of imposter bond scams between January 1 and November 20 this year, but the real figure is likely to be much higher, with research showing only around 13 per cent of scam victims report their losses.
Earlier this year, ACCC Deputy Chair Delia Rickard described the increase in bond investment scams as “alarming”.
“As interest rates rise, people looking to invest in bonds are falling victim to these scams after searching online for investment opportunities. This is often after they complete enquiry forms on fake third-party comparison websites,” Rickard said.
“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.
“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.”
As many victims were contacted by phone, Rickard said a key way to prevent being scammed was to call a bank or financial service directly using details sourced yourself – rather than using any phone numbers or links provided.
Banks also had an important role to play in preventing scams, Rickard said.
“Organisations should actively monitor for, warn about and promptly seek the removal of websites impersonating their brand,” Rickard said.
*Name has been changed.
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