I was in the queue at Boots at the weekend and I couldn’t help but overhear a conversation about ‘common-a-garden’ fraud. Someone was claiming that a fraudster had cleaned out £9000 from their bank account. Someone else was complaining about a similar fraud but for a lower sum. I keep hearing the exact same comments as I wonder about various high streets. “You know Mrs Smith, she got hit after an email/phone/text scam. Didn’t know what to do”.

Call the police? Probably not. The horrible truth is that for most ‘small time’ frauds – big time for the victims – the police are about as much help as a chocolate teapot. But I think there’s something important going on here. A simplistic interpretation of Hobbes view of government is that it’s there to protect us from the bandits and criminals. When it fails in that task, then the entire legitimacy of the government is called into question.

There is, I think, a widely held belief amongst most ordinary folk that fraudsters can get away with it. Just as most ordinary burglars also get away with it. I think violent crime has had less impact on ordinary people in recent years whereas financial crime is a very different story. The public sees that justice is NOT being done, that criminals do get away with it and that the fraud authorities are powerless to stop the bad guys. This feeds through into a wider, austerity-fuelled, narrative that the police generally are under-resourced and understaffed. Overall, I buy this narrative but with qualifications – my sense is that the police spend too much time dealing with broken down families and useless social media spats and not enough on frontline activity.

But the general sense that fraud has become prevalent and unstoppable is I think a potential political nightmare. If I were a smart populist, I’d be calling for an aggressive new front line to be started on a new kind of zero tolerance – zero tolerance for scumbags who defraud honest people. How about we fund a proper War against Fraud and abandon the increasingly pointless war Against Drugs and the questionable “war” against terrorism. The government would like to privatize the problem and make the banks pay but this is fundamentally about making sure that crime doesn’t pay and that is the job of government, plain and simple. Would I pay an extra £100 a year for a beefed-up national crime agency that took fraud seriously – you bet.

A new retail bond

News came last week that we have finally ended the major issuer retail bond famine – we have a new retail bond, although its actually by an existing issuer, International Personal Finance Plc. Summary term sheet is below.

I actually have IPF on my long watchlist for cheap equities. Here’s what my current dashboard says about the stock, courtesy of Sharepad. It hasn’t got the world’s greatest balance sheet and gearing is a tad high but fundamentally this is a solid equity, with a decent dividend. That alone suggests to me that a yield of 7.75% through until the end of 2023 represents more than decent value.

Key Metrics

While we are on the subject of retail bonds, Mark Glowrey of City and Continental – who are also book running the IPF issue – reminds us that prices for the long line of retail charity bonds continue to improve. The table below has the range of issues and they are all trading well above par with increasingly tight Yields to maturity. Curiously I see huge interest in all these trendy green bonds but slightly less institutional interest in these charity bonds which I think represent a much better ESG sales pitch.