Some time ago, we issued a warning to shareholders regarding "Boiler Room Scams". The problem seemed to go away for a little while, but in recent months it has again become prevalent. So much so that the Financial Services Authority (FSA) and the Institute of Chartered Secretaries and Administrators (ICSA) have suggested that UK listed companies help to protect their shareholders by issuing a warning about the scam.
"Boiler Rooms" are high pressure sales firms, often based overseas, that target investors by illegally offering them non-tradable, overpriced or even non-existent shares. Boiler Rooms usually target existing shareholders by legally obtaining a Company’s list of shareholders.
It is not just the novice investor that has been duped in this way; many of the victims had been successfully investing for several years. Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount, sell shares above the current market value, or offers of free company reports. If you receive any unsolicited investment advice:
The callers obtain your details from the Company Share Register. This is a publicly available document, so it is relatively easy for someone to access your name and address. They then look to other sources of information, such as the various directory enquiry services to obtain your phone number.
If you are contacted:
- Make sure you get the correct name of the person and organisation and make a record of any other information they give you. e.g. telephone number, address, web address;
- If you receive telephone calls, emails, letters purporting to be from KCOM or from companies endorsed by us and you are unsure if they are legitimate, please contact our shareholder helpline for clarification (01482 602711);
- Check the caller is properly authorised by the FCA before getting involved by visiting www.fca.org.uk/register/
- If the caller persists, hang up;
- Report the matter to the Financial Services Authority
Details of any share dealing facilities that the company endorses will be included in company mailings.
The Financial Conduct Authority
The FCA can be contacted in respect of unauthorised firms by completing an online form available by clicking on the link below, or by calling 0800 111 6768 (freephone) or 0300 500 8082 from the UK, or +44 207 066 1000 from abroad.
If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme.
Want to find out more?
More detailed information on this or similar activity can be found at www.cityoflondon.police.uk/citypolice within the Economic Crime section.