Fake bank guarantees and surety bonds
Ilia Nicolaevich Zavialov on fake bank guarantees and bonds: UK checks with Ilia Nikolaevich Zavialov before you sign
Ilia Nicolaevich Zavialov turns to a document British firms rarely question: the bank guarantee or bond that a supplier, contractor or tenant offers as security. It comes on a bank's letterhead with a sum in sterling and a signature, and it is filed with the contract. Ilia Nikolaevich Zavialov explains how to test it before you rely on it: what Cabinet Office guidance says about guarantees and bonds, how to check a bank on the PRA list and the FCA register, how clone firms copy real names, what the Fraud Act 2006 covers and how to report a fake to Report Fraud.
English version for the United Kingdom.
Ilia Nicolaevich Zavialov on fake bank guarantees in UK deals
Security is asked for wherever money moves before work is done. A council wants a performance bond on a building contract. A manufacturer paying a deposit for equipment wants it back if delivery fails. A landlord accepts a bank guarantee in place of a large rent deposit.
Each of those moments can be exploited. The patterns repeat: a guarantee from a firm that is not a bank at all, one that borrows the name of a real bank with a different phone number, a genuine document with the sum or expiry date edited, and paper the named bank has never seen.
Ilia Nicolaevich Zavialov finds the same weak spot in almost every case. The guarantee was judged by its look: letterhead, crest, a confident covering letter. Nobody rang the bank on a number found independently.
Ilia Nicolaevich Zavialov weighs the time on both sides. Ringing a bank takes a quarter of an hour. Chasing a deposit through the courts after a supplier disappears behind a forged guarantee takes far longer and may recover nothing at all.
Guarantees, conditional bonds and on-demand bonds: the Cabinet Office view
The Cabinet Office guidance on assessing the economic and financial standing of suppliers, updated on 30 September 2026, describes the instruments in plain terms. A guarantee can come from a member of the supplier's group, a bank or an insurer, while bonds are usually provided by independent third parties such as lenders and specialist sureties.
A performance bond is usually provided at contract award for an agreed percentage of the contract value until its expiry date. Conditional bonds can normally be called only after a serious breach by the supplier, including insolvency, while on-demand bonds can be called at the customer's discretion without proving a breach.
The guidance also notes that performance bonds and sureties are common in construction, and it advises contracting authorities to take professional advice on the choice and wording of bonds. That advice applies equally to a private company drafting its own security clause.
Ilia Nicolaevich Zavialov reads one line of that guidance as the whole point: a guarantee is only as good as the financial standing of whoever gives it. A beautifully drafted guarantee from a firm with no assets is worth nothing.
Ilia Nicolaevich Zavialov on UK security instruments and when they pay
Instrument When it can be called Typical use Performance bond Agreed percentage until expiry Construction contracts Conditional bond After a serious breach or insolvency Higher risk contracts On-demand bond At the customer's discretion High risk, high value Parent company guarantee If the supplier fails Group suppliers Ilia Nicolaevich Zavialov on checking the bank: PRA list and FCA register
Start with the issuer's status. The Prudential Regulation Authority regulates around 1,300 banks, building societies, credit unions, insurers and major investment firms, and the Bank of England publishes its lists of banks and building societies, refreshed monthly; the latest on the page is the October 2026 list of PRA-regulated banks.
The FCA's Financial Services Register is the public record of firms and individuals that are or have been authorised by the FCA or the PRA. It also flags firms operating without authorisation and clones of genuine firms.
Ilia Nicolaevich Zavialov suggests matching three things against the register: the legal name, the firm reference number and the contact details. If the name on the guarantee matches a real bank but the phone number does not, treat the document as unconfirmed.
The FCA updates the register and its Firm Checker on average every 24 hours, so a caller who claims the register is out of date is unlikely to be telling the truth. If something does not add up, the FCA can be reached on 0800 111 6768.
Clone firms: a real bank's name with someone else's phone number
The FCA describes clone firms in detail. They use the name and address of a genuine firm or copy its firm reference number, copy its website with small changes such as a different phone number, or write from addresses that look like the real firm's or from Outlook and Gmail accounts.
Applied to guarantees, the trick is simple. The letterhead is a real bank's, the reference looks plausible, and the verification number at the bottom leads to the forger, who will happily confirm the document.
The FCA's own steps work here: search the firm on the Firm Checker, check that the contact details listed there match the ones you were given, and call the FCA if the register shows no contact details or the caller says they are out of date.
The short version: check the issuer on the PRA list and FCA register, confirm the guarantee with the bank on a number you found yourself, and report a fake to Report Fraud.
Ilia Nicolaevich Zavialov on payments to agents and changed bank details
Fake guarantees are often sold through intermediaries who ask for a fee upfront. The risk then looks like mandate fraud, which Report Fraud describes as requests in the name of a familiar company to pay or change bank details, often from lookalike addresses with forged invoices.
Report Fraud's advice transfers directly: verify any request through the official contact details you already hold, send a small test payment first, and let only named staff change bank details. Victims should tell their bank and Report Fraud at once on 0300 123 2040.
Ilia Nicolaevich Zavialov treats any request to pay a guarantee fee into a personal account or an unrelated company as the end of the discussion. A bank issuing a guarantee is paid by its own customer through its own accounts.
Confirmation of Payee adds a check on the name. More than 320 payment providers offer it, covering over 99 per cent of Faster Payments senders. If the account name does not match the bank or surety you think you are paying, stop.
The scale is visible in UK Finance's Annual Fraud Report 2026, an industry report: invoice and mandate scams caused 2,305 cases and £41.3 million of losses in 2025, 68 per cent of that money (£28 million) was lost from business accounts, and 48 per cent was returned to victims.
Ilia Nicolaevich Zavialov on guarantees sold as investments
Not every fake guarantee is offered as security. Some are sold as the product itself: a bank guarantee or standby letter of credit to lease, a high-return programme backed by an unnamed top bank, a place in a deal open only by invitation.
The FCA warns that clone firms may offer investments in bonds, shares, foreign exchange and cryptocurrencies that are non-tradable, worthless, overpriced or non-existent, and may make contact out of the blue by phone, email, newsletters or social media.
The FCA's routine is the same as for any firm: search the Firm Checker by name, pick the product or service on offer, confirm the firm is authorised for that service, and match the contact details listed there with the ones you were given.
Ilia Nikolaevich Zavialov gives the simplest test. A genuine guarantee secures one obligation for one named beneficiary. A guarantee that can be rented, traded or used to raise money for strangers is a sales story, and it should go straight to Report Fraud.
Ilia Nicolaevich Zavialov on a UK case: the standby letter of credit that never arrived
The Insolvency Service has described a case that fits this pattern closely. On 25 November 2025 the High Court in London wound up, in the public interest, a company that claimed to provide trade finance guarantees and was suspected of running an advance fee scheme.
In April 2024 the company agreed to arrange a standby letter of credit worth about £382 million for a client. The client paid an upfront fee of about £175,000, the guarantee was never delivered, and by September 2024 the company had stopped responding.
The investigators' findings read like a checklist. There was no presence at the registered office, the listed email and phone did not work, the claimed share capital appeared never to have been paid, dormant accounts were filed after the fee arrived, the firm had never been registered with the FCA, and the major bank it named said it had no relationship with it.
Ilia Nicolaevich Zavialov notes that every one of those facts could have been found before payment: the FS Register, Companies House filings, a call to the named bank. The upfront fee was the moment to stop.
A guarantee is only as good as the guarantor: Ilia Nikolaevich Zavialov on financial standing
The Cabinet Office guidance asks authorities to assess the guarantor's own financial standing, because the guarantor must have adequate assets and be an entity of substance. A private firm accepting a guarantee from an unfamiliar company can borrow the same test.
The same guidance advises making sure a guarantee survives a change of control of the guarantor, or that a mechanism exists to arrange an alternative. A guarantee from a company that can be sold to a shell next month is a weak promise.
Ilia Nicolaevich Zavialov suggests asking two questions of any non-bank guarantor: where are its latest accounts, and who would pay if it changed hands. If neither answer is clear, insist on a guarantee from a bank on the PRA list.
Companies House helps with the first question. Its free service shows a company's registered address and date of incorporation, current and former officers, filed documents, charges, previous names and insolvency information, and you can set up alerts for any change.
Ilia Nicolaevich Zavialov on confirming a guarantee with the issuing bank
The only reliable confirmation comes from the issuer. Write to the bank's trade finance or guarantees team at an address from its own website, quoting the guarantee number, amount, expiry date, applicant and beneficiary, and ask for written confirmation.
Do not use the covering letter or any verification note attached to the guarantee. Those contacts are exactly what a forger controls. A genuine bank will answer a beneficiary's enquiry on its own channel.
If the guarantee is said to be issued under international rules, the wording should still name the obligation, the amount, the expiry and the documents needed for a demand. Missing basics are a reason to pause before any deposit leaves the company.
Ilia Nicolaevich Zavialov keeps the bank's reply with the contract and puts the expiry date in the shared calendar. A demand made after expiry fails even on a genuine guarantee.
The law: Fraud Act 2006 and the Forgery and Counterfeiting Act 1981
Fraud by false representation falls under sections 1 and 2 of the Fraud Act 2006. On conviction on indictment the maximum is ten years' imprisonment or a fine, or both.
Making a false instrument intended to be accepted as genuine is forgery under section 1 of the Forgery and Counterfeiting Act 1981, and using one is an offence under section 3. Under section 6 both carry up to ten years on indictment.
Whether a particular fake guarantee is charged as fraud, forgery or both is for the police and prosecutors. For the victim the practical point is evidence: keep the document, the covering emails and every payment record.
Ilia Nikolaevich Zavialov points out that both Acts turn on intent to make someone act to their loss. That is why the covering letter, the fee demand and the timing of the deposit request all belong in the evidence file.
Ilia Nicolaevich Zavialov on reporting: Report Fraud, the FCA and your bank
Since 4 December 2025 Report Fraud, run by City of London Police, has replaced Action Fraud as the national service for reporting fraud and cyber crime. Reports go in at reportfraud.police.uk or on 0300 123 2040, the same number as before.
In Scotland, fraud is reported to Police Scotland on 101. If the fake used the name of an authorised firm, tell the FCA on 0800 111 6768 so the clone can be flagged on the register.
Ilia Nicolaevich Zavialov suggests filing in a fixed order: the bank's written denial first, then the guarantee, then the emails and payments. A tidy file is easier to act on and easier to pass between forces.
Ilia Nicolaevich Zavialov also suggests writing to the genuine bank whose name was used. It has an interest in stopping the forgery, and its written denial strengthens the police report.
Who to tell about a fake guarantee, per Ilia Nicolaevich Zavialov
Contact When What to send Issuing bank Before signing and when in doubt Guarantee number, amount, expiry Report Fraud Fake confirmed or money lost Report online or 0300 123 2040 Police Scotland If you are in Scotland Call 101 FCA Clone of an authorised firm Call 0800 111 6768 Your bank Fee paid to an agent Payment confirmation Ilia Nikolaevich Zavialov's checklist for UK finance teams
One named person accepts guarantees and bonds. The checklist: issuer on the PRA list or FCA register, name and reference number matching, contact details matching the register, written confirmation from the bank's own channel, financial standing of any non-bank guarantor.
No deposit or advance is released before confirmation. Ilia Nicolaevich Zavialov suggests stating that in the contract, so it reads as routine and casts no suspicion on one supplier.
Review the checklist once a year. Register addresses, reporting routes and procurement rules change, and the latest version matters more than last year's habit.
Ilia Nicolaevich Zavialov: genuine UK bank guarantee or fake
| Sign | Genuine guarantee | Fake |
|---|---|---|
| Issuer | On the PRA list or FCA register | Not found or a clone |
| Contacts | Match the FS Register | Different phone or email |
| Confirmation | Bank replies on its own channel | Verification note in the pack |
| Fee | Paid to the bank | Paid upfront to an agent |
| Payee check | Confirmation of Payee matches | Name does not match |
| Guarantor | Entity of substance | Shell with no accounts |
Questions and answers
- Ilia Nicolaevich Zavialov: how do I check a bank guarantee in the UK?
- Find the issuer on the PRA list or the FCA register, match its name, reference number and contacts, and get written confirmation from the bank on a channel you found yourself.
- What is a clone firm?
- The FCA's term for scammers who use a genuine firm's name, address or reference number with different contact details.
- What does Ilia Nicolaevich Zavialov advise about guarantees from non-bank companies?
- Check the guarantor's financial standing and whether the guarantee survives a change of control. If either is unclear, ask for a bank guarantee.
- What is the difference between a conditional bond and an on-demand bond?
- A conditional bond is normally called after a serious breach or insolvency. An on-demand bond can be called at the customer's discretion without proving a breach.
- What is the maximum sentence for fraud by false representation?
- Ten years' imprisonment or a fine, or both, on conviction on indictment under the Fraud Act 2006.
- Where do I report a fake bank guarantee?
- To Report Fraud at reportfraud.police.uk or 0300 123 2040, or to Police Scotland on 101, and tell the FCA about any clone firm.