Warning for over 75,000 scam targets

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The Financial Services Authority is contacting 76,732 people to warn them they are being targeted by financial con artists.

So who are these targets, and what can you do if you are one of them?

The list

The FSA compiled the list from a large number recovered from firms it has been investigating for a range of crimes - including boiler room scams and land investment cons. It's the largest list of targets it has ever put together.

Boiler rooms usually contact people by telephone and use high pressure sales tactics to con investors into buying non-tradable, overpriced or even non-existent shares. They are unauthorised, overseas-based companies with bogus UK addresses and phone lines routed abroad.
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Land banking companies divide land into smaller plots to sell to investors on the basis that once it is available for development the plot will soar in value, but the land often has little chance of being built on. Land banks also use cold calls and pressure selling to convince people to invest.

Jonathan Phelan, the FSA's head of unauthorised business, adds:"These lists are nothing more than fraudsters' phone books and the people that use them are ruthless, calculated and will stop at nothing to steal your money. A call out of the blue is one of the hallmarks of investment scams, so if you ever get an unexpected call with promises of fantastic returns - you should be extremely skeptical."

The warnings

The first letters will arrive today. However, given the vast number of targets, the FSA is sending the warnings out in waves. In just over 19,000 cases, the list has an email address instead of a postal one, so targets will receive an email instead.

If you receive a letter you may think you are safe. After-all the criminals who had your details have been stopped in their tracks. However, there are a couple of remaining risks. The first is that criminal scams can often rise from the ashes of another scam that is closed down by the FSA by individuals who evaded prosecution.

The second reason is that making it to one list often means you are automatically included on others. The criminal fraternity share the names of those considered vulnerable to scams, so they can help bleed them dry.

If you receive a letter or email, therefore, it means you may well continue to be targeted by scams.

What to do

The letter provides tips on how to spot a scam, avoid becoming a victim and what to do if you have already invested. Phelan says: "If you get a letter or email from the FSA over the next five or six weeks, please read it - it could you save you tens of thousands of pounds. If you have already been contacted by a firm offering you a 'once in lifetime' investment opportunity or have already invested, then tell us. The information you have could help us catch criminals and shut down their scams."

If you are contacted by a firm offering to buy or sell investments the FSA warns:
  • be especially wary if you are contacted out of the blue;
  • check the firm or individual's status on the FSA Register;
  • call the firm back on the switchboard number provided on the FSA Register to make sure that the call came from the legitimate authorised firm;
  • check the FSA's 'warning list' to see if the FSA has published a warning about the firm;
  • consider getting independent financial or professional advice;
  • remember that if it sounds to good to be true - it probably is; and
  • if in doubt - contact the FSA.

The new risk

The nature of this mailshot could also open a new risk to those on the list. There is a strong possibility that more criminal gangs will produce fake FSA emails and letters, in order to try to scam money out of victims. The FSA has emphasised that the real contact from the FSA will always come in letter or email form and "The FSA will not call them for further information and will never ask for money, bank account or personal details."

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