What is a term deposit scam?

An advanced scam involving fake term deposit and bond investments is posing new risks to Australians. Scammers are impersonating legitimate financial services businesses to offer fake investment opportunities in an attempt to lure would-be investors to transfer large sums of money to fraudulent accounts. These scams are significantly harder to spot than other investment scams. Here’s what you need to know to keep you and your loved ones safe.

What is a fake term deposit scam?

Fake term deposit scams involve a scammer offering you a fake investment opportunity, usually for a term deposit or bond, and redirecting your funds to their own bank account. Scammers are impersonating financial services businesses to try and convince you that they are issuing the investment opportunity on behalf of a large company or the Australian Government.

How fake term deposit scams work

Scammers may capture your contact information via online advertisements promoting the fake investments. You may also be contacted directly if the scammers already have your details.

These fake term deposit and bond opportunities look extremely sophisticated. They may include official-sounding terminology, government logos, APRA and ASIC logos, and even real Australian Financial Services Licences (AFSL) and Australian Business Numbers (ABN). These numbers may be entirely fake, or they may be using the details of a legitimate business.

You’ll then be asked to complete an application form and provide personal identity documents. The scammer may use this information to steal your identity.

Lastly, the scammer will ask you to transfer funds into a bank account. They may claim this account is a ‘client segregated account’ that is separate from the company itself. The account may look legitimate and may be held with a legitimate financial institution. However, it is held by the scammer.

What are the warning signs of fake term deposit scams?

The complexity of these term deposit scams makes them harder to spot. While other investment scams may use too-good-to-be-true returns promises or lack legitimate documentation, these scams appear much more convincing. Scammers will often make consistent contact over a number of weeks or months to gain your trust. That’s why it’s critical that you do your due diligence. Never invest without multiple checks.

Here are the red flags to look out for:

• Cold outreach or unexpected contact. Any phone calls, emails or SMS text messages you receive claiming to be from a financial services business should be treated with extreme caution – especially if you haven’t dealt with them before.
• A lack of digital footprint for the financial services business offering the investment. Scammers deliberately impersonate businesses without much of an online presence to limit consumers’ ability to compare their ‘real’ website with the scammers’ fake one.
• A scammer claiming to ‘issue’ bonds or term deposits in well-known companies like banks and ASX-listed companies. These businesses don’t use external providers to issue on their behalf – consider this a red flag.
• A scammer claiming to ‘issue’ Treasury or government bonds. This is an immediate warning sign of a scam.
• Overly positive or nonspecific online reviews. There are websites that allow scammers to publish fake reviews to look legitimate.
• Requests for funds to be transferred. While this is part of some legitimate investment scams, always be wary of any request for money. Any account you are transferring to should be in the same of the relevant financial services business.
• The details of the receiving bank account. Is the recipient bank account with a different financial institution to the supposed provider of the term deposit?

Please note that the red flags provided are not an exhaustive and there may be variations of these that could result in scam losses.

How to stay protected

• Treat all unsolicited contact regarding investment opportunities as suspicious. Do your own research before you act.
• Get a second opinion from a financial advisor you know and trust.
• Look out for the use of government logos. This may strongly indicate a scam.
• See if the investment opportunity is available online. If it’s not, it may be a scam.
• Follow ASIC’s ‘Check before you invest’ tool.
• Check the Australian Financial Services Licence on the ASIC Connect Professional Register. Bear in mind that even if it’s real, the scammer may be impersonating that company.
• Confirm bank account details by checking the BSB on the Australian Payments Network. You can also independently contact the bank directly using the details on AFCA’s website.
• Check for scam warnings via at Scamwatch or at Bendigo Bank’s security alerts.

Remember to Stop, Think and Protect

Stop – before you make a quick decision, stop. Could this be a scam? Scammers benefit from rushed decision making.

Think – what are the red flags here? Why have I been contacted? How can I verify this is legitimate?

Protect – act quickly if something feels wrong. Contact your bank for support if you’re transferred funds. Report the scam to Scamwatch.

What to do if you think you’ve been scammed

If you notice unusual activity or if a scammer gets your money or information, visit www.bendigobank.com.au/security to report it and get support. If you think you have transferred money to a scammer, call us immediately on 1300 236 344.

If you have provided personal information, particularly photo identity documents like passports and driver’s licences, contact IDCARE to take steps to protect your identity.

For the latest scam alerts and information to keep yourself and your family safe online, visit www.bendigobank.com.au/security