The 9.5% bond scam
🔸 Plus: Google accidentally deleted an entire investment platform 🔸 BlackRock now controls the second-biggest Bitcoin fund 🔸 Bumble apologised for running an anti-celibacy ad 🔸
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Beware the 9.5% bond scam
There is a fantastic post on Reddit’s r/UKPersonalFinance subreddit that everyone should read. Its title is, “Is 9.5% on a 5 year bond unusual?” and the user wants to know if he or she should invest in it:
“I’ve been offered a 5 year bond from a major investment institution with annual interest of 9.5%. This is way more than I’ve seen being offered elsewhere. This makes it attractive, but is this a too good to be true offer, and potentially a scam? How can I validate if it is legitimate? It all looks very convincing, and I’ve got to a point where they’ve sent me an application form, but my scam warning alert is sounding in my head.”
Spoiler alert: It’s almost certainly a scam, and it’s a relatively sophisticated one.
Here’s how it works
The user banks with the Co-Op, a well-known high street brand, obviously. He received an email that appeared to be from his bank:
“First contact was an email branded co-op. I am already a customer - I bank with them, use a number of their other services and am a member of their loyal scheme.”
“Lots of people in this thread jumped on that I was cold [called] or cold emailed, implying that should have been a red flag. I’d say it was warmer than that though as I regularly receive co-op marketing for different products and services, so was not immediately suspicious - that only started when I got the follow-up call.”
The bank was offering him a “sustainability” bond (one offered to finance climate-friendly business activities) with an interest rate of 9.5% — nearly twice what you’re likely to get elsewhere from cash savings or other corporate bond offerings. Thinking the email was legit, he replied asking for more info:
“A guy allegedly from Morgan Stanley called me [and] gave me what seemed a pretty typical sales pitch - said lots of good stuff, answered all my questions and was pretty convincing. He sent me an application form, but there are just a few things on there that don't seem to quite add up.”
“I bank with coop and it was pretty coincidental timing as I've recently invested in some schemes that focus on sustainability, which this aligns with.”
In fact, when Moneyin2 checked the site yesterday it looked a lot like a real site for the Co-Op bank. It was sophisticated, well-designed, and the branding looked real. It was easy to see how someone might be fooled into thinking this really was a place to invest in a Co-Op bond sponsored by Morgan Stanley.
Crucially, the URL was wrong. The Co-op is at co-operativebank.co.uk but the scam site was at sustainablecoop.co.uk. (You can see an archived version of it here.)
How to check out a financial scam
The Reddit thread has a ton of great advice for anyone who wants to know how to check out the legitimacy of a too-good-to-be-true offer.
First, if everyone else is offering 5% as a top rate it should set alarm bells ringing if a well-known financial institution is suddenly offering nearly twice that and you’re the only one who seems to know about it.
Second, banks don’t call you on the phone to sell bonds. One redditor said:
“I work for Morgan Stanley on the trading floor and there is exactly zero chance they would call you like this. It's completely against the rules. While we do have a retail offering they only come through our private wealth customers which have significant net worth and you would know if you were one.”
More usefully, there are sources all over the web where you can check out potential scams. You can search The Financial Conduct Authority web site, where they publish warnings against well-known current scams. (This one has been running since late last year).
And the forums on MoneySavingExpert.com are another good place to get a gut check.
Suddenly offline
In the last 24 hours, the site has mysteriously gone offline — which is what you’d expect a scam website to do.
The Reddit user who asked about it didn’t fall for the scam, but warned that even smart people can get taken in by this stuff. After all, you have to know what Morgan Stanley and sustainability bonds are, why the Co-Op might be offering them, and have enough money to be researching investment vehicles with high interest rates. The scam targets relatively sophisticated investors, in other words:
“It has been a really interesting learning experience though, with little damage done. It has also really increased my understanding of how people fall for these scams - on the face it seemed not-too-far out of the realms of possibility that it may have been real, and it presented very well. This is why I went through the first steps of expressing interest.”
And for dessert …
Google accidentally deleted an entire investment platform. UniSuper CEO Peter Chun told the fund’s 620,000 members that due to an error at Google Cloud, all of their accounts had been deleted. They were restored from a backup after more than a week.
GameStop shares jumped more than 70% simply because the “Roaring Kitty” account on Twitter/X came back to life. Keith Gill, the guy behind Roaring Kitty, was the activist who defeated attempts to short Gamestop shares in 2021, starting the “meme stock” craze. He had not tweeted in three years.
BlackRock now controls the second-biggest Bitcoin fund. The asset manager’s Bitcoin ETF is now worth $16.7 billion, behind only Grayscale, which holds $28 billion.
Bumble has apologised for running an anti-celibacy ad. The campaign said "A vow of celibacy is not the answer" and "Thou shalt not give up on dating and become a nun".
Tesco CEO Ken Murphy’s compensation doubled to £10 million. “Tesco staff earn £12.02 or £13.15 an hour, depending on where they work,” the BBC noted, archly.
The UK and its dependencies are responsible for 40% of the entire world’s criminal money-laundering operations. The government wants to shine more light on dirty money.
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