Shares gangs target 11,000 on database

Published on Monday 8 December 2008 21:08

UP TO 11,000 UK shareholders were yesterday warned that their personal details were on a database that was being used by fraudsters.

The Financial Services Authority believes fraudsters were using the names to target people and illegally sell them shares as part of "boiler room" schemes.

Boiler rooms, which are often based overseas, use high- pressure sales techniques to sell shares illegally to investors.

The shares are often over-priced, cannot be traded or may not even exist.

The FSA has written to the shareholders after acquiring the fraudulent database from the Canadian authorities. It contained personal details such as people's names, addresses and telephone numbers.

The regulator said it was likely that the list, which fraudsters typically call a suckers list, had been sold on to a number of share fraud gangs.

Jonathan Phelan, head of retail enforcement at the FSA, said: "The details on the database provide fraudsters with valuable information that can be used to convince people that they are dealing with legitimate stockbrokers, in order to win their trust. These criminals sound authentic, are smooth talkers and can be very persistent. If anyone calls you out of the blue offering to sell shares, just hang up or you stand to lose a lot of money with very little hope of ever getting it back."

The regulator urged people to avoid becoming victims of share fraud gangs by checking that anyone offering to sell them shares was registered by the FSA.

It advised people to call back firms that contacted them using details from the FSA register to verify their authorisation.

It also advised them to simply hang up the telephone on any caller who persisted in trying to sell them shares.