Fraud database leaves thousands at risk
Thousands of UK shareholders could be at risk from boiler room scammers after Canadian authorities uncovered a fraud database containing their personal details.
The UK financial watchdog, the Financial Services Authority (FSA), is warning there is a real risk that the “suckers list”, which contains the names, addresses and telephone numbers of 11,000 shareholders, has been sold off to a number of fraudsters.
These fraud gangs are often based overseas and use high pressure sales techniques to target investors illegally, offering them non-tradable, overpriced or even non-existent shares.
Jonathan Phelan, head of retail enforcement at the FSA, says: “The details on the database provide fraudsters with valuable information that can be used to convince people that they are dealing with legitimate stockbrokers, in order to win their trust. These criminals sound authentic, are smooth talkers and can be very persistent."
Phelan adds: "If anyone calls you out of the blue offering to sell shares, just hang up or you stand to lose a lot of money with very little hope of ever getting it back."
The FSA has written to the shareholders affected. It also recommends that investors who receive suspect calls should:
* Check that anyone offering to sell them shares is registered with the FSA.
* Call the company back using the details in the FSA register to verify their authorisation.
* Report any company that cold calls them to sell shares to the FSA by calling 020 7066 1000.
* Hang up the telephone if the caller persists.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.
This is an umbrella term for an organisation, usually unlicensed by the financial authorities, which uses forceful, persistent and highly aggressive telephone sales techniques to sell unlisted or non-existent securities to private investors. In the majority of cases, the shares being sold are worthless and the boiler room vanishes, leaving the investor out of pocket. Although they boast impressive UK addresses, the firms operate from boiler room “hotspots”, such as Spain, Switzerland, Dubai, Japan, Bermuda or the US, so they are outside the remit of the Financial Services Authority.