Issue 3 March 2015
WMA JOURNAL In this issue
Financial Crime Technology The EU Managing Change
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Protect yourself from boiler room share scams If you get an unexpected phone call from someone you don’t know trying to sell you shares it may be a boiler room scam. Boiler room organisations run a financial scam using convincing sales tactics to persuade you to buy shares which are of little or no value. If you do buy the shares you may find they are worthless. The majority of boiler room victims are male and experienced investors - it is not just the novice investor who can be duped. The average loss is £20,000, with around £200m* lost in the UK each year. If you deal with a boiler room they will not be authorised by the Financial Conduct Authority (FCA) and you may not have the right to complain or claim compensation. Generally it’s against the law to ‘cold call’ a person to try to sell shares or other investments. So, if you haven’t invited the call just hang up!
How to recognise a boiler room • The first time you hear from a boiler room could be by post or email. They may have written to you offering a free research report into a company in which you hold shares, or a free gift or discount on their dealing charges. • You will then receive a phone call from a well trained, highly professional sounding salesman. They can be very persistent, never taking ‘no’ for an answer. They often use a script to help them answer your questions or ward off your objections. They phone their victims every day until they finally make a sale, or until you hang up on them. • They will often claim to be from legitimate firms, or firms which sound legitimate and have professional looking websites. • You may be told that you have already entered into a contract to buy the shares and are under an obligation to pay. This is not the case as such contracts are not enforceable under UK law. *Source: Financial Conduct Authority
How to protect yourself FCA
• Get the name of the person and organisation contacting you. • Always ensure the firm is on the FCA Register and is allowed to give financial advice by visiting http://www.fsa.gov.uk/register/home.do. • Use the details on the FCA Register to contact the firm, rather than a direct line they might give you. • Call the FCA Consumer Helpline on 0800 111 6768 if there are no contact details on the Register or you are told they are out of date. • Check the FCA’s list of known unauthorised overseas firms at http://www.fca.org.uk/consumers/protect-yourself/unauthorised-firms/unauthorised-firms-to-avoid.
Report a scam • If you have any doubts, call the FCA Consumer Helpline with details, or complete the ‘Unauthorised firms reporting form’ at http://www.fca.org.uk/consumers/protect-yourself/report-an-unauthorised-firm. • If you think you have been a victim of boiler room fraud you should always contact Action Fraud on 0300 123 2040 or via their website http://www.actionfraud.police.uk./ For a list of FCA authorised stockbrokers visit the WMA website www.thewma.co.uk (go to ‘Buying and Selling Shares’) or contact WMA via telephone on 020 7448 7100 or email at info@thewma.co.uk.
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