Share Fraud Warning
Share fraud includes scams where investors are called out of the blue and offered shares that often turn out to be worthless or non-existent, or an inflated price for shares they own. These calls come from fraudsters operating in 'boiler rooms' that are mostly based abroad.
While high profits are promised, those who buy or sell shares in this way usually lose their money.
The Financial Services Authority (FSA) has found most share fraud victims are experienced investors who lose an average of £20,000, with around £200m lost in the UK each year.
If you are offered unsolicited investment advice, discounted shares, a premium price for shares you own, or free company or research reports, you should take these steps before handing over any money:
- 1 Get the name of the person and organisation contacting you.
- 2 Check the FSA Register at www.fsa.gov.uk/fsaregister to ensure they are authorised.
- 3 Use the details on the FSA Register to contact the firm.
- 4 Call the FSA Consumer Helpline on +44 (0)845 606 1234 if there are no contact details on the Register or you are told they are out of date.
- 5 Search our list of unauthorised firms and individuals to avoid doing business with.
- 6 REMEMBER: if it sounds too good to be true, it probably is!
If you use an unauthorised firm to buy or sell shares or other investments, you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.
Report a scam
If you are approached about a share scam you should tell the FSA using the share fraud reporting form at www.fsa.gov.uk/scams, where you can find out about the latest investment scams. You can also call the Consumer Helpline on +44 (0)845 606 1234.
More and more unwanted emails, which are part of fraudulent schemes, are finding their way into our Inboxes. And the people and technology behind these scams are becoming more sophisticated.
These emails claim to offer you an investment opportunity from Old Mutual - they often even use Old Mutual letterheads and logos.
There are also emails sent to individuals telling them that they have won a big lottery prize (often UK£500,000) under either the UK or Euro Lottery (sometimes both) and that the lottery prize is underwritten by Old Mutual. Old Mutual does not underwrite lottery promotions and customers are advised not to pay over money to anyone suggesting that they have won a lottery prize supported by Old Mutual. It is strongly recommended that customers should not engage with anyone who approaches them directly or via email in this regard and, in particular, customers should avoid providing personal or bank details to such people.
The advanced fee scam - What's it all about?
The 4-1-9 or Advanced Fee Scam typically takes the form of a letter or an email sent to you by a syndicate. Members pretend to be senior government-, financial services- or banking officials. In most cases, this email or letter will offer you a unique and pretty big investment opportunity.
These scams tend to ask you to invest or help the sender in moving large amounts of money across countries or territories. As a reward for your help, the fraudsters promise you a large sum of cash, or a percentage of the transaction's overall amount.
To get this transaction going, the fraudsters ask for your personal information and instruct you to deposit money into certain bank accounts. There is, of course, no real investment opportunity. And the money you deposit is never used for paying for services or fees - it's pocketed by the fraudsters.
Most of the scams involve fraudulent business proposals. These are typically about:
Transferring lottery wins
Lucrative currency conversion deals
Buying land or property
Transferring surplus funds from over-invoiced contracts
Selling goods below market price, especially crude oil and gold
Paying out money from wills
Very often the fraudsters will tell you that the transaction is illegal in the country they live in and that they need your help to complete it. Some even go as far as justifying their efforts by questioning the legitimacy of the government of the country in question. This is, of course, an attempt to ensure that they get your commitment to not raise the alarm.
What to look out for
These syndicates use several fraudulent methods to convince you that the offer they're making is genuine and that the financial benefits are so worth your while that you should make payments upfront.
If you receive an unsolicited email or letter claiming to be from a reputable financial services company or government office, look out for:
An email or letter from "officials" representing a foreign government or financial institution;
Offers to transfer millions in foreign currency from "overcharged contracts" funds - especially if they promise to transfer these into your personal bank account;
Offers that encourage you to travel overseas to complete the transaction;
Requests to provide blank business or company letterheads, bank account details, telephone and fax numbers;
Official-looking stamps, seals and logos that emphasise the "authenticity" of the proposal, for example letters with logos from reputable organisations such as banks and financial companies; and
Requests for you to pay upfront or transfer money into accounts, as your payment for advance fees for various taxes, attorneys, transactions or even bribes.
What to do when you're targeted
DON'T respond to the unsolicited email or letter!
If you receive a phone call of this nature, tell the caller you're not interested.
Report the matter immediately to the South African Police Service's Commercial Branch at firstname.lastname@example.org
Check with the institutions mentioned regarding the statements made in the email or letter.
If the email or letter is on an Old Mutual letterhead or mentions Old Mutual, call Tip-offs Anonymous on:
United Kingdom: 0800 028 5010
United States: 0800 249 8145
South Africa: 0800 222 117
Namibia: 0800 222 117
Zimbabwe: 0800 4105