Warning to shareholders
Fraud – protect your shares
Please take a few minutes to read this and hopefully it will provide a few tips on what type of things to look out for to spot a fraudster.
In recent years, many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based unauthorised ‘brokers’ who target UK shareholders.
The caller will typically be calling out of the blue and they may offer unsolicited advice, to sell your shares at a premium, to buy shares for you at a discount or free company reports. Although they may not ask for money in the first instance, and assure you that nothing is payable, this is likely to come later.
These operations are commonly known as ‘boiler rooms’. These ‘brokers’ can be very persistent and extremely persuasive. They often have websites to support their activities, their advice and the companies they purport to represent. You may be requested to complete some form of documentation. We strongly suggest that you do NOT do this as it often contains much of the information required for them to commit fraudulent activity in relation to your shareholding.
A 2006 survey by the Financial Services Authority (‘FSA’) has reported that the average amount lost by individual investors in these types of frauds is around £20,000. It is not just the novice investor that has been duped in this way; many of the victims had been successfully investing for several years.
If you receive any unsolicited investment advice:
- Make sure you get the correct name of the person and organisation.
- Check that they are properly authorised by the FSA before getting involved by visiting www.fsa.gov.uk/FSAregister/ and contacting the firm using the details on the register.
- Report the matter to the FSA either by calling 0845 606 1234 or visiting www.fsa.gov.uk/pages/consumerinformation.
- If the calls persist, hang up.
- If you have paid any money away, call Action Fraud on 0300 123 2040.
If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme.
The FSA can be contacted by completing an online form at http://www.fsa.gov.uk/Pages/Doing/Regulated/Law/Alerts/form.shtml.
More detailed information on this or similar activity can be found on the Consumer Information section at www.fsa.gov.uk/pages/consumerinformation.