Bonds Fraud Review – How to Avoid Bonds Frauds

If you've ever purchased bonds, you know that there's a good chance that you've been scammed. Scammers usually offer high-risk bonds for inflated prices. In addition, they often use third-party valuations to boost their prices, but these are usually false. This means that you should never pay for a bond you don't intend to sell.

Scams involving bonds

Scammers have been targeting individuals seeking to invest in bonds, especially now that interest rates are rising. One common method used by scam artists is to use a valid CUSIP number of a legitimate Treasury security to make their offers seem legitimate. CUSIP stands for Committee on Uniform Securities Identification Procedures, and every security has one. These numbers are publicly available, but don't identify a specific security, so using one doesn't necessarily indicate that it's legitimate.

Another scam involving bonds is the imposter bond scam, in which a scammer impersonates a legitimate bank or financial institution and claims to sell government bonds or fixed-term deposits. According to Scamwatch figures, the number of imposter bond scams has more than doubled in the first half of this year compared to the same period last year. Scamwatch expects more of these scams to occur this year.

The scam involves a phone call from an unknown number. The caller says that their loved one has underpaid their bond and will go to jail unless they provide money immediately. This scam often targets older individuals and those who have recently moved.

Scams involving surety bonds

There are several ways to avoid surety bond scams. The first scam involves fake bonds that are not legitimate. The bonds are issued by individuals pretending to be surety companies. In some cases, the individuals even use fake seals or signatures. This scam costs the victim hundreds of thousands of dollars.

In order to avoid such scams, bond producers should be especially vigilant and careful when choosing surety companies. Using a trusted and reputable surety company is essential for a smooth transaction. Business Insurance magazine published a recent article about scammers who operate in this industry.

While surety bond fraud is rare, it can ruin the reputation of the surety industry. Fraudulent surety companies can take advantage of contractors, project owners, and obligees. In order to protect yourself from these scams, choose a surety that has been rated by the Treasury Department's Office of Bonds and the Surety & Fidelity Association of America's Bond Verification Service.

Scams involving third-party valuations

Third-party valuations in bonds are one of the most common ways for scam artists to exploit investors. These valuations are often inaccurate and misleading, and they often make false statements that deceive investors. For example, some fraudulent third-party valuations claim that historical bonds are payable in gold or money today. These assertions are often untrue, and they've been used to trick investors into paying upwards of $150,000 for historical bonds.

Fraudsters often pose as a reputable bank that offers such services, and they try to sell their bogus bonds to unsuspecting investors for a high price. Some of these investments even promise high rates of return, with little or no risk. These fraudulent claims are often based on the idea that a $100 million investment will yield $1 billion in a year. These fraudulent programs will often involve buying and selling financial instruments in cycles, in order to generate the high returns they claim.

Scams involving share certificates

Scammers often target individuals looking for online investments. They offer high returns, but these may not be realistic. They may use the terms "restricted" and "restricted shares" to make themselves appear legitimate. Be wary of companies with websites that look legitimate, but are not authorised by the FCA. The FCA has a Warning List that lists firms to avoid.

Scammers usually operate out of boiler rooms, cold-calling potential and existing investors and offering worthless, overpriced, or nonexistent shares. This kind of fraud is often carried out by using highly persuasive sales tactics. Victims can lose everything - from their savings to their family home. Even experienced investors have fallen victim to these scams, with the biggest individual losing PS6 million.

In order to avoid becoming a victim of a scam, be vigilant and report suspicious activity. If you suspect a scam, call the local police or report it to your local regulator.

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