Beware scam operators offering a deal on shares
A HOST of public companies yesterday warned investors a share scam was in operation after unauthorised firms started cold calling investors.
The so-called 'boiler room' scam sees investment firms, usually from overseas, contact shareholders offering to buy or sell shares at vastly inflated prices above face value.
The fraudster offers investors worthless, overpriced or even non-existent shares. In many cases the fraudster will pressure the victim to agree to the deal quickly. While they promise high returns, those who invest usually end up losing their money.
Notices have been posted on the Independent News & Media and Fyffes websites warning investors of such scams.
"Please be aware that companies, typically from overseas, sometimes make unsolicited contact with shareholders offering to buy their shares or to sell shares on their behalf at prices which can be significantly higher than the market price of the share," both said.
The scam, while sounding simplistic, has been successful in the past. According to the FSA, victims lose an average of £20,000 (€24,035) to similar frauds, while UK investors are ripped off to the tune of £200m a year. The highest single recorded loss was £6m.