UK regulator warns targets over share scam sucker list
Turning up the heat on boiler room fraudsters
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A UK regulator is taking the unusual step of contacting 38,000 potential share fraud targets after recovering a "suckers list" used by boiler room fraudsters.
The Financial Services Authority plans to write to the thousands of people on the list (which contains phone numbers, names and addresses) warning them that their details are circulating among boiler room share fraud scammers. Boiler rooms normally operate outside the UK, outside the reach of regulators and compensation schemes. Fraudsters use high-pressure sales techniques to sell non-tradeable, overpriced or non-existent shares.
Target lists maintained by the fraudsters sometimes feature notes on an intended mark's interests and list of blue-chip shares they already hold. The list is thought to be in active use.
Jonathan Phelan, the FSA's head of unauthorised business, explained: "This is the biggest list we've ever recovered and by acting quickly and contacting every single person on it we're hoping we can stop people losing money. Boiler room fraudsters often sound professional so it's easy to be drawn in by their overblown claims and give them money to invest. The reality is however that the shares are worthless or don't exist and the money is lost forever."
An FSA statement provides a list of tips to avoid getting scammed. Potential investors should regard cold calls with skepticism. Checking the FSA Register to make sure they are dealing with an authorised dealer is also good advice.
The regulator estimates that boiler room fraud fleeces UK investors of around £200m per year. Victims lose an average of £20K. The FSA received 1,000 complaints about the type of scam last year, a sizeable chunk of the 3,500 gripes it tackles every 12 months. ®
COMMENTS
Sample letter
Dear John Doe,
here at the FSA, we take Boiler Room Fraud very seriously. Unfortunately, your details have come up on a "target scam list" and we would like to ensure that you are aware of the risks of entering such a scheme. Click here to go to our website where you can enter your details and receive a personalised risk document highlighting potential frauds that may come your way. The more details you enter, the better we can match your entry to our lists. Please have ready:
a) Name
b) Address
c) Bank account details: Sort code, Acc Number, Security code from back of bank card
d) NI Number
e) Mother's Maiden name
f) Pets name
g) Inside leg measurement
Many thanks,
Prince Oustaffu of Nigeria
FSA Section Chief
Lagos
"unusual step of contacting 38,000 potential share fraud targets"
Probably only unusual as they rarely get hold of such a list.
It makes good sense to me.
Rule #1
Almost no-one approaches you and offers something out of the goodness of their heart. No matter how you're approached - always treat it with suspicion.
If they appear to have no ulterior motive then /that's/ suspicious for a start.
Paris - because she's approachable.
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