Are you on the latest investment scam suckers list?

7 December 2010

City watchdog the Financial Services Authority (FSA) has once again written to tens of thousands of investors this week to warn them they could be targets of boiler room share fraudsters.

The letters are being sent after the FSA recovered a list of more than 49,000 new names, addresses and telephone numbers on the biggest ever ‘suckers list' it has discovered.

The FSA believes those on the list may be contacted out of the blue and offered worthless shares and so is contacting investors to warn them they could become victims of fraud. It is estimated that the average boiler room victim loses £20,000.

It is possible that some have already been contacted by criminals and the list is thought to still be in use by fraudsters operating in the UK and abroad and is likely to have been circulated between different boiler room networks.

The greatest concentration of targets is in London, although there are a significant number based in Scotland and the South East of England. In May this year, the FSA wrote to more than 38,000 investors whose details appeared on a boiler room target list.

Margaret Cole, the FSA's managing director of enforcement and financial crime, says: "So far this year we have contacted 95,000 people across the UK to warn them about the risks of investing via boiler room fraudsters.

"This latest list is the biggest we've ever recovered and we are contacting every single person on it in the hope we can stop people losing money," she explained, adding: "Even if only one in ten we contact heed our warning it could mean around £96 million is not invested in these scams."

Cole warns that boiler room fraudsters "often sound like the real deal so it's easy to be drawn in by their professional and high pressure sales tactics. In reality however, the shares are worthless or don't exist and the money is lost forever."

The FSA recovered this list via its ongoing intelligence work with counterparts in the United States, Homeland Security Investigations and the Internal Revenue Service - Criminal Investigation.

Share fraudsters, commonly known as boiler rooms, usually contact people by telephone to con investors into buying non-tradable, overpriced or even non-existent shares.

These fraudsters are unauthorised, normally overseas-based companies with fake UK addresses and phone lines routed abroad.

People can avoid becoming victims of share fraud by:

• Hanging up the telephone if they receive an out of the blue call offering them shares;
• Checking the FSA Register to see if the person selling shares is authorised to do so;
• Calling the company back using the details on the FSA Register to verify their identity;
• Make additional checks to confirm that you are dealing with an authorised or registered firm and have the correct contact details, such as checking on the firm's website, with directory enquiries or Companies House; and
• Reporting any company that cold calls them to sell shares to the FSA or the Police.

Anybody who thinks they may have been targeted by a boiler room scam should call the FSA's customer contact centre on 0845 606 1234.

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