Don’t be a sucker

Have you been offered shares in businesses over the ‘phone. If so you may be on a hit list advises the Isle of Man Office of Fair Trading (OFT) and the Financial Crime Unit (FCU) of the Isle of Man Constabulary.

The UK Financial Services Authority (FSA) has found the biggest ever so-called "suckers" list of potential targets for share fraudsters.

The list contains more than 38,000 names, addresses and telephone numbers of people who are being targeted by teams of bogus dealers – known as “boiler rooms” - who try to sell them worthless shares. “Suckers” lists are drawn up from those people who have already fallen for a scam and once a victim has been duped, he or she will be contacted repeatedly by "loaders", experienced scam merchants looking for repeat sales, and "sloppers" who promise that the lost funds can be retrieved if further payments are made.

Calling people “suckers” makes them out to be very naive but the fraudsters are very sophisticated and plausible and even the most savvy person can fall prey to these scammers.

The FSA is advising that the names and details are still being passed around, so those on the list could be contacted at any time.

Although the greatest concentrations of targets are based in London and the South East, Yorkshire and Lancashire, there may well be Island residents on the list. The FSA believes UK investors lose hundreds of millions of pounds a year to boiler rooms, with the average loss per investor being put at £20,000.

But what can you do if you are offered shares in this way?

Chairman of the OFT Mr Bill Henderson advises “Put the ‘phone down straight away. Legitimate companies will not call you out of the blue (cold calling) so if you do get a call like this hang up the ‘phone – don’t get involved. You will only lose out. The scammers may be persistent so keep hanging up. Tell the OFT what has happened. Don’t let yourself become a “sucker”. Remember, if in doubt always check with the OFT. Let us know what is going on.”

The best advice if you do want to buy or sell stocks or shares is to make sure you deal with an authorised/registered stockbroker.