Investors are being urged to be vigilant after an investment bond scam has emerged, whereby the fraudsters are pretending to be from Aviva Investors in order to dupe savers.
In an email, seen by FTAdviser, the fraudsters claim that Citibank is hosting an Aviva fixed rate bond at 6.125 per cent.
The email boasts that investors will receive more financial freedom, higher interest rates, monthly and quarterly returns, and no early exit penalties, and that their investment is fully protected by the Financial Services Compensation Scheme.
It states: “The fixed rate bond we are currently offering is not a new issue bond. In fact it is one of our long term bonds that started a long time ago in 2001 and will end in 2036.
“The reason the interest rates are so high is simply because when the bond started, interest rates were much higher. These rates are still being paid, this will continue until redemption 2036.”
It also claims that the investment is sold on a first come first served basis due to popular demand.
The email uses both Citibank’s and Aviva Investors' branding and logos.
Aviva said it has reported the scam to Citibank and has taken action to alert the relevant law enforcement agencies and request the domains, which fraudulently use Aviva’s name, are taken down.
A spokesperson from Aviva told FTAdviser: “Unfortunately, this represents a sophisticated ‘clone firm’ investment bond scam, similar to those which has been used to impersonate over 25 financial institutions since the end of 2019.
“Aviva and other financial institutions have been working closely with the authorities to combat and disrupt the scam which is ever-evolving, and with the scammers going to great lengths to make their fraud appear legitimate.
“We always try to assist victims of these scams, providing them with ways they can protect themselves, as well as how they might be able to recover money under the UK Voluntary Banking Code.”
A wider issue
‘Clone firm’ scams have increased in recent years as fraudsters have become more sophisticated in their ways.
Data published by Action Fraud in January showed that in 2020 individuals reported average losses of £45,242 when investing with fraudsters imitating genuine investment firms.
Reports of clone firms increased 29 per cent in April 2020 compared with March that year as fraudsters looked to take advantage of uncertainty created by the Covid-19 pandemic.
‘Clone firm’ scams work by fraudsters setting up sham websites to look exactly like the genuine websites they are copying, as well as online portals which mirror genuine online portals. Most of the time these are very convincing.
These scammers often acquire real marketing material available online and edit the content to promote their own fake investments.
Genuine Companies House registration numbers, FCA registration numbers and office addresses for the impersonated companies are all easily found online, and scammers know how to use these to make themselves look legitimate.
They also often mix genuine details with fraudulent details (fraudulent phone numbers, cloned email addresses and fake products they created), which helps them bypass the victims’ due diligence, such as checking the FCA Register or Companies House.
Fraudsters can also spoof a company’s genuine phone number when calling a victim. When the number flags up on a person’s phone it appears that it is coming from the company’s number but in reality it is coming from a different number altogether.
Aviva has warned savers that if it sounds too good to be true, it probably is and that people should be very cautious if they are approached by anyone offering a 'great deal' and the chance to unlock cash in their pension or a 'fantastic investment opportunity' with guaranteed returns.
The industry has come together on scams recently, with 17 groups, including adviser trade body Pimfa, calling for the Online Safety bill to include scams as a means of ensuring consumers are better protected against the financial and emotional harm caused by fraudsters.
In the Queen’s Speech earlier this month (May 11), a new version of the Online Safety bill was introduced to include financial fraud and user-generated online scams but not fraud via advertising, emails or cloned websites.
Tim Morris, independent financial adviser at Russell & Co, said social media companies have a responsibility to police fraudulent content.
Morris said: “I appreciate they are not deemed to be publishers of material on their platform, yet recent examples of them fighting hate crime, racist comments and disinformation highlight the important role they play in protecting the public.
“And if protecting people against losing their life savings isn’t deemed as important by them and by the government, we are all in trouble.”
amy.austin@ft.com
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