Are You A Fraudulent Investment Target?

Over 76,000 people are being contact by the Financial Services Authority (FSA) as they are targets of fraudsters trying to fraudulently sell investments in land or worthless or non-existent shares. Are you a target?

The FSA recovered a number of lists from companies who they believe were selling the fraudulent investments to innocent victims.

All of the lists are believed to be current and were being used to either sell fake or worthless shares, or plots of land with the promise of great investment returns once developed – even though this was unlikely to ever happen.

The FSA is contacting those believed to be targets.

Letters will start to be received today. For around 20,000 of the targets, only email addresses were recorded and so an email will be issued.

The letter contains tips on how to spot a scam, avoid becoming a victim and what to do if you have already invested.

Be aware that the FSA will not call you for further information and will never ask for money, bank account or personal details.

A copy of the letter can be found here.

Jonathan Phelan, the FSA’s head of unauthorised business, said: “If you get a letter or email from the FSA over the next five or six weeks, please read it – it could you save you tens of thousands of pounds.

“If you have already been contacted by a firm offering you a ‘once in lifetime’ investment opportunity or have already invested, then tell us. The information you have could help us catch criminals and shut down their scams.”

The FSA recommends the following steps if you have been contacted by a firm offering to buy or sell investments:

• be particularly wary if you are contacted out of the blue
• check the firm or individual’s status on the FSA Register and call them back on the switchboard number provided on the FSA Register to make sure that the call came from the legitimate authorised firm
• check the FSA’s ‘warning list‘ to see if the FSA has published a warning about  the firm;
• consider getting independent financial or professional advice – remember that if it sounds to good to be true – it probably is
• if in doubt contact the FSA on 0845 155 6355 or if you have already invested you can use the online reporting forms on the Operation Bexley webpage.

What are Boiler Rooms?

Boiler rooms invariably telephone people and then use high pressure sales tactics to con investors into buying non-tradable, overpriced or even non-existent shares. They are unauthorised, overseas-based companies with bogus UK addresses and phone lines that are routed abroad.

What are land banking Companies?

Land banking companies divide land into smaller plots to sell to investors on the basis that once it is available for development the plot will soar in value, but the land often has little chance of being built on. Land banks also use cold calls and pressure selling to convince people to invest. The FSA does not regulate the sale of land, but land banking may amount to a collective investment – something that does require FSA authorisation.

As these unauthorised firms aren’t covered by the Financial Services Compensation Scheme, if you invest through their business, it is highly likely you will lose your money if the firm goes bust or disappears.

MoneyHighStreet comments: “As seen in the advice from the FSA, if you’re offered something that seems too good to be true, the likelihood is that it is too good to be true.

“If you think you are the victim of these fraudsters do contact the FSA or indeed your bank as they are working closely together on this ‘Operation Bexley’.

“It’s not just these scams though that you need to be aware of. There are others, including phishing emails which try to get your valuable personal information.

“If you shop online too, make sure you take steps to do safely – use trusted websites, keep your browser updated, check the padlock or site identity button, consider using paypal to make payments or a prepaid credit card. Above all choose a strong password every time you register on a site and never use it on more than one site.”