How advisers detected an ESG bond scam
Financial advisers have been responsible for identifying a sophisticated scam Citibank prospectus and notifying both the regulators and Citi about its existence.
The scam prospectus, purporting to be for the “Citibank ESG Bond”, was picked up by advisers within financial planning group AdviceIQ, after clients sought more information about the offering via their accountant.
The minimum investment entry point stated in the fake document is $50,000 with a fixed return of 3.9% for a six month investment.
The document seeks to persuade people to invest in a bond which is “tax free” because “the government has a target in place to have zero net emissions by 2050”.
The document also attributes to the Australian Prudential Regulation Authority (APRA) that all funds are subject to a $250,000 capital guarantee.
It states:
How the tax free status works
“All interest payments to the client will be non-taxable. We issue statements for self assessment tax return clients pre stamped and authorised by the Australian Taxation Office (ATO). We will also provide the tax statements every 6 months or at the end of your term for your records. If you require a statement to be issued for tax reasons, please notify us via email and we can issue you this on your behalf.”
Where the capital guarantee is concerned, the document presents as follows:
The document, which has been provided to Financial Newswire, appears to have been professionally produced and only raises alarm bells because it breaches convention via its use of Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) logos.
AdviceIQ director, Paul Harding-Davis said the document had raised a number of alarm bells with some of the firm’s advisers and contact had immediately been made with Citibank, ASIC and APRA.
He said Citibank, after being contacted, had later confirmed the document was a scam while neither ASIC nor APRA indicated they were necessarily previously aware of the document or what action they would take.
The document stood out because of its liberal use of the APRA, Australian Taxation Office and ASIC logos.
Yep I had a client send me the info brochure too, very keen to invest.
Unable to get more detailed PDS or Prospectus, emails bounce back, no phone calls through, raised my concerns and then seeing the ATO logo use confirmed my suspicion.
Luckily for our client we avoided investing.
Actually the one I saw was HSBC.
Same scam though.
Seems multiple brands used.
you need smarter clients…
Advisers failing to add value again (-:)
I would imagine a properly structured product approval process (APL) within the dealer-group would prevent these being offered to clients.
It’s aimed at direct investors, no dealer group APL checking usually involved.
Some clients have received them and fortunately asked their advisers
Reported a similar scam to ASIC recently….involving NAB Bonds….Sounds exactly like the same mob operating again….They do just enough to make it look real and they take our complex financial laws to their advantage.
A 75 year old lady that lost $50,000 to them came back to me for help…This lady I actually I had to turn away 12 months prior. My ASIC levy fees had just gone up, and I told her ASIC would take me to jail because the value provided on finding a home for $50,000 in relation to the fee and the complicated regulatory process I’d need to follow would be hard to prove I offered any value….Turns out I sent her straight into the hands of these scammers. “DIY” became destroy it yourself.
Initially being a Financial Adviser I was hesitant to deal with the NAZI department….Afterall, It was like being a Jew and reporting a theft in Nazi Germany… I had many similar encounters that went no where. This time I plucked up the courage to call ASIC… after all the the trail of using Bank accounts and Australian companies it was so obvious a Graduate Cop just out of the Academy could track them down. ASIC response was disappointingly disgusting….When I reported they said “what do you want us to do”… followed by a “we’ll add it to the list”. Not my first encounter with ASIC and dodgy investments either and same response. I really blame ASIC for their bad legislation and making it easy for these guys to operate.
ASIC’s complication of the financial services law have made it very easy for these guys to scam investors…To me they’re too busy putting honest, reliable Financial Advisers out of business… back to finding spelling mistakes in my FDS.
Do advisers get a refund on their ASIC levy for doing the work for them? Oh wait…I guess we now know who we truly work for…
…and don’t get paid by!!!
TIP any time you read the letters ESG on anything you know its a scam…
ESG = Easily Scammed Group…