Police and FSA warn of overseas share fraudsters targeting UK investors

Written by Ray Clancy

Tuesday, 02 February 2010 10:18

Up to 10,000 investors in the UK could be the target of overseas fraudsters trying to sell them worthless shares, the police and the Financial Services Authority are warning.

The warning comes after the discovery of a master list that City of London Police believe contains the names, and in some cases addresses and telephone numbers, of people the fraudsters will try to contact.

They have written to them this week to warn them about the scam which involves them contacting people by telephone and using high pressure sales techniques to persuade them to buy non-tradable, overprices and nonexistent shares.

The list was discovered by the FSA and City of London Police who have now launched Operation WARN because of serious concerns that the list is currently being circulated and used by so called ‘boiler room’ fraudsters who are often based overseas and difficult to track down.

The list may have been drawn up from publicly available shareholder lists. Those making the calls work for unauthorised, overseas based companies with bogus British addresses. Anyone who buys shares through the companies risks losing their money as the unauthorised firms are not regulated and no compensation is available.

‘By writing to people now, we can raise awareness of this type of fraud and help protect people from losing money to these criminals. Legitimate companies should not normally call you out of the blue offering to buy or sell shares,’ said Jonathan Phelan, head of the unauthorised business department at the FSA.

‘If you get such calls, just hang up and report it. These fraudsters will sound authentic and have legitimate looking websites but they just want to steal your money with little hope of you getting it back,’ he advised.

‘If you have already been contacted by a boiler room do not give them any money or information. Let us know so that we can do everything possible to stop them preying on people in the UK,’ added Phelan.

Steve Head, head of the City of London Police’s Economic Crime Directorate, said intelligence suggests that this list of people from across the UK is currently being shared among crimminals. ‘I would urge those people who receive a letter from us in the next few days to contact the FSA and City of London Police on the Operation WARN helpline. All the information the public gives us as a result of Operation WARN will help in the fight against boiler room fraudsters,’ he added.

The letter, which is the first stage of Operation WARN, explains what people on the list can do to protect themselves from the fraud. The FSA and City of London Police have also launched a new secure consumer helpline 0845 602 2185 so people who have received the letter can call in for further information.