Over the last year many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based 'brokers' who target UK shareholders offering to sell them shares in US or UK markets which often turn out to be worthless or very high risk shares.
The name boiler room scam is given to such operations due to the high pressure sale techniques used by the call centre operatives initiating the scam in order to persuade their target the opportunity is a “once in a life time” offer to make money. Cold calling to sell shares is illegal and the criminals may try to get round this by writing to the customer first to say that a “salesman” will be in touch. At the time of the call the “salesman” will often be forceful, persistent and highly pressurising and as such create a sense of urgency that the opportunity must be taken immediately.
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. Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports. If you receive any unsolicited investment advice:
If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme.
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 investments scams. You can also call the Consumer Helpline on 0845 606 1234.
Details of any share dealing facilities that the company endorses will be included in company mailings.