“According to newspapers foreign “boiler room” sales gangs are conning British customers out of millions of pounds a year by claiming they are promoting ethical investments in forests, bio-fuels and carbon credits.
Investors including accountants, lawyers and policemen have been swindled out of their life savings after buying share and other green investments which turn out to be overpriced, worthless or bogus.
City of London police have identified 1,200 high-pressure sales operations – so-called boiler rooms based in Spain, Eastern Europe and the Far East which are making £300m a year out of Britain. They say the gangs which once specialised in commodities such as oil and gold are now preying on their victims with a range of “ethical” investments ....”
So are you being telephoned almost daily by people trying to sell you one form of investment or another? If you own a number of shares, these scammers will have purchased (quite legitimately) lists of shareholders from registrars. They are a pain in the neck because the scammers are very convincing and they come in two forms:-
- Scamming for individuals investments; and
- Scamming you for business investments normally linked to marketing and advertising.
The days seem to be over (at least for the time being) of scammers ringing me up about investing in weird and wonderful shares. I have just had a few months of so-called green investments and now carbon trading seems to be the flavour of the month.
So how do you combat pushy scammers? Coincidentally, last month, the Financial Services Authority (my regulator) published a list of dubious firms. You can always check a firm on the FSA’s register but be careful. Many scammers have posh UK addresses (often drop-offs in practice) and UK phone numbers but are not based in the UK. I won’t now talk to a company which is not FSA regulated.
Last October I (even I) was swayed to purchase a few shares and was promised a certificate. Nothing has arrived so I am taking the stockbroker to the Financial Ombudsman Service. The stockbroker is not only regulated by the FSA but is also mentioned on the London Stock Exchange website. I will keep you posted on this case. It is particularly annoying because the company in question, in which I may or may not hold shares, has recently announced a deeply discounted rights issue.
Apart from checking whether a company is on the FSA register, you can always mention that you are going to check whether they are a scam on the FSA scam list. That normally makes a third of scammers put the phone down on you. A victory!
If you have any ideas to help me and other investors, and indeed investment advisers, to counter increasingly sophisticated scammers, please e-mail me. At the moment the best e-mail is nigel.bolitho@gmail.com
Business Scammers
Here the favourite idea is to mock-up a good looking advert which will go into some magazine and then money is paid and no magazine is produced. The latest interesting scam is to suggest adverts on a moving screen at a local independent hospital near Cambridge. I initially fell for that idea before actually going to the hospital and realising that there was no regular advertising on the two screens in reception.
The upshot is that most of my advertising now is in local village magazines which have been around for a long time because I am worried about losing money on business scams. They are much harder to deal with and so the answer has to be NO to all of them which is a pity in some ways as marketing is an important part of our business.
So Beware Scammers
By the way Nigel Bolitho has a Level 4 qualification so will be soldiering on as an IFA!
If you have any business scams you would like to share with myself and others, please e-mail me.
PS My hopes were dashed watching cricket highlights on Thursday by a carbon credit scammer. Told him to p**s off.
