Beware the dodgy dealers who phone to sell you investments. No legitimate investment company cold calls potential clients
I am not a sucker. I don’t fall for dodgy deals – I write about them. But I’m on a “sucker list”: a directory of contact details of potential losers that dodgy investment firms trade among themselves and use to target potential victims.
I receive two to three calls a week from these scam companies. They all aim to part me from a minimum £10,000. Over the past year I’ve had wine (many times), carbon credits (starting to reappear), rare earth elements, and overseas land. Recently, they have become more inventive with offers of “unmined gold”, Bank of America shares, and stakes in an oil well prospect. But whatever the deal, they all use similar sales techniques, starting with a phone call.
According to watchdog the Financial Conduct Authority (FCS), UK investors lose about £200m a year to high-pressure investment boiler rooms. It reckons some 10,000 victims are ripped off for an average £20,000.
Some are straight-forward frauds, while others are real shares but near worthless or highly risky.
This is the tip of the iceberg. Many victims do not report losses, perhaps because they are too ashamed, or they know that the perpetrators, usually based overseas, get clean away or their chances of compensation are remote.
The FCA has a wide variety of resources on its website, but they depend on potential victims knowing where to look. With the number of scam firms increasing and becoming more aggressive, it’s not working.
The simplest advice is just to slam down the phone on anyone who calls you to sell an investment. That’s it. Simple and to the point. After all, no legitimate investment company ever cold calls for potential customers.
The FCA website has the register of authorised firms, a list of unauthorised firms known to be operating in the UK, and a number of warnings. But these all have weaknesses. The register does not apply to wine, land, carbon credits, rare earth minerals and physical gold, so scammers can correctly claim they don’t need authorisation. The unauthorised firm list is also historical – yet dodgy dealers rarely last long and change names frequently. The warnings are hedged with words such as “usually”, “might be” and “probably”.
Typical calls I have received are:
• Gold in the ground. A firm (Gold Assets Associates), operating from a London maildrop, offered me gold at $1,000 an ounce – $380 less than the current price. All I would get is a certificate entitling me to unmined gold from a Canadian mine in two years.
• A Zurich maildrop firm (Capital Resources Development Group) called to try to get me to buy into Bank of America. But what it was selling was highly geared Contracts for Difference (betting on a stock) and not shares. It is easy to lose an entire stake in a very short period. The salesman claimed he also advised “seven out of the nine biggest hedge funds”.
• A Dubai-based firm (Quantum Commercial, but which has no connection with Quantum Group in Bournemouth) offered me shares in an oil prospect in Illinois. Salesman Ben Sharpe promised I could make an annual (and conservative) £17,682 for a £12,750 investment. He reassured me my money would go to a UK Barclays account.
The firm sent a purchase order form, oil well commercial licence agreement, well check private account opening form and an oil well prospectus. Sharpe later harangued me as a “coward”, “loser” and “failure” when I refused to go ahead.
Link to article: feeds.theguardian.com/c/34708/f/663889/s/333645e1/sc/25/l/0L0Stheguardian0N0Cmoney0C20A130Cnov0C0A20Cgold0Eoil0Eland0Escam0Einvestments/story01.htm