SHARE SALE AND INVESTMENT FRAUD


Share sale, boiler room, hedge fund or bond fraud involves bogus stockbrokers, usually based overseas, cold calling people to pressure them into buying shares that promise high returns. In reality, the shares are either worthless or non-existent.


How it works


Victims are usually contacted out of the blue by an overseas-based stockbroker who sounds plausible and offers investment opportunities that seem too good to be true. You may also be promised free research reports, special discounts and ‘secret’ stock tips.


In fact, the fraudsters are cold calling as many people as possible with the aim of persuading them to invest in shares that are either non-existent or so worthless that they are impossible to sell. They may provide false share certificates and other documents to make the investments seem credible. Once the fraudsters have


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squeezed whatever money they can from investors, they disappear.


Share sale frauds tend to start with a telephone call. Using hard-sell techniques, the fraudsters pressure their victims into making rushed decisions and insist that their victims keep their investment secret to ensure maximum returns. Because they aim to make their business seem legitimate, they will often use technical jargon, impressive job titles and mock websites to appear credible.


What to do if you are a victim of share sale fraud


If you are suspicious about a scheme’s authenticity, always investigate the company’s status and contact details via the Financial Conduct Authority, (FCA) which regulates stockbrokers based in the UK. You can check a stockbroker’s authenticity by visiting the FCA’s register of authorised firms, list of unauthorised firms and individuals, and list of unauthorised overseas firms.


Alternatively, you can call the FCA’s consumer helpline on 0800 111 6768.


If you have bought shares from somebody you don’t know over the telephone, and have given them your bank account details, it is almost certain that you are a victim of share sale fraud.


First, break off all contact with the fraudster and report the incident to Action Fraud and your bank. Keep any written communications you’ve received as evidence. Bear in mind, however, that because many of these schemes are run from abroad, they are not covered by UK jurisdiction or compensation schemes. You are therefore unlikely to recover any lost investment.


Having been a victim once, you could be a target for other frauds. Fraudsters often share details about people they have successfully targeted and will use different identities to commit further frauds. You may also become a target for fraud recovery fraud (see page 5 of this booklet).


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