Shares
The scam
A stranger rings you out of the blue offering shares in a company you've probably never heard of. If you buy them, you may be left with worthless shares. You may also have no rights to complain or claim compensation from relevant UK schemes as most of these scams are run from overseas.
Before you get the sales call, the scammers might first approach you by post or email, or you might see their services advertised on the internet. They might offer you a free research report on a company in which you already hold shares, or a free gift or a discount on dealing charges. You might respond to these initial approaches thinking it is free and there is nothing to lose. But by responding, you are probably agreeing to be contacted by the firm in the future. This is probably written in the small print.
In another share scam, you get a call from someone offering to buy shares you already own. This will usually be at a higher price than their current market value, and so the offer may sound attractive. They will ask you to pay something up front as a bond or other form of security, which they say you'll get back if the sale doesn't go ahead. They might ask you to sign a form preventing you from disclosing details of the offer. They can be very persistent, phoning you many times. This is no more than an advance-fee scam - where you hand over your money and never hear back from the scammers again.
Protect yourself
- Make sure the firm is on the Financial Service Authority (FSA) register of authorised firms. If it isn't on the register, you won't have access to the FSA's complaints and compensation procedures.
- Be very sceptical about calls out of the blue offering shares - even if the caller claims to be from a firm that is on the FSA register.
- Ask for the contact details of the caller. And check their identity with the firm they claim to work for, using the firm's contact details on the FSA register.
- Look closely at the FSA advice on share scams and read its leaflet 'Warning to shareholders - boiler-room scams'.
If you think you've been a victim of this scam, call Consumer Direct for advice on 08454 04 05 06.
Example scam
See what a bogus shares mailing might look like.
