Investing

Bond Scam Alert

  • 23.Jun.2021
  • Richard Murphy,  XTB

Please be aware that a sophisticated international syndicate of bond scammers is currently operating in Australia.

The bonds referenced in these scams are actual corporate bonds issued by blue chip corporations such as Telstra and Qantas. The scam quotes bond coupon rates as the available return, rather than the yield to maturity. This provides a highly inflated view of the return investors can expect from owning these bonds.

The scammers are also using false documents and bogus contact details to suggest links to established investment firms such as PIMCO, IFM, Vanguard, Citi, HSBC and UBS.

To date the scammers have focused on a 7.75% Qantas bond due to mature in March 2022 and a 4.00% Telstra bond which matures in September 2022.  The scammers are quoting the legitimate bond coupon rates, suggesting that this is the return investors will receive. As interest rates have fallen since these bonds were issued and they are now approaching maturity, their actual returns are now considerably lower than their coupon rates – both are now returning less than 1%.

Both of the bonds above are legitimately covered by XTBs (YTMQF3 and YTMTL1) and available to trade on the ASX. We have always highlighted the Yield to Maturity as the key consideration for investors in fixed-rate XTBs.

The scammers reference the fact that XTBs, which cover both of these bonds, trade on the ASX in an attempt to legitimise their scam.

ASIC Action

The Australian Securities and Investments Commission (ASIC) has issued a warning regarding this scam and Qantas has confirmed the securities referred to by the scammers are fake.

ASIC and NSW Police are currently investing the matter.

Buying XTBs on ASX

XTBs are only available to buy or sell on ASX, via registered brokers such as CommSec, Bell Direct, Nabtrade Westpac etc, or through a registered financial planner acting on your behalf. Any transaction referencing an XTB which is not traded via a registered broker or planner should be considered suspicious. Any interactions with potential scammers should be reported to ASIC.

Where to find more information on this scam

https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-010mr-asic-warns-investors-of-imposter-bond-scams/

https://asic.gov.au/about-asic/news-centre/news-items/warning-qantas-bonds-investment-opportunity-a-scam/

https://www.qantas.com/au/en/support/contact-us/scam-assistance.html

https://www.afr.com/companies/financial-services/google-promotes-bond-scam-amid-police-probe-20210527-p57vse

https://www.afr.com/companies/financial-services/scammers-shift-to-spruiking-blue-chip-bonds-20210621-p582s8

Events

  • 27Oct 2021

    YTMF16: Westpac Bank BBSW + 0.81% 27 OCT 2022

    This is the coupon date

  • 29Oct 2021

    YTMDO2: DOWNER 3.70% 29 APR 2026

    This is the coupon date

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