Boiler room scam
“Boiler room scam” warning to IQE plc shareholders July 2009
If you already own shares in a company, including those traded on AIM, you may receive a call from someone offering to buy your shares, usually at a higher price than their market value which may sound very attractive. They will also ask you to pay something up front, as a bond or other form of security, which they say you'll get back if the sale doesn't go ahead. They could also ask you to sign a form preventing you from disclosing details of the offer.
Don't be fooled by such an approach! It's probably no more than an advance fee scam – where you give them your money and never hear back from them again. They can be very persistent, phoning you many times and even sending you documents or forms to complete.
Over the last year, many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based 'brokers' who target UK shareholders. These operations are commonly known as 'boiler rooms' and the 'brokers' can be very persistent.
Shareholders are advised to be very wary of any such unsolicited advice.
If you receive any unsolicited investment advice:
• Make sure you get the correct name of the person and organisation • Check that they are properly authorised by the FSA before getting involved • Report the matter to the FSA either by calling 0845 606 1234 or visiting the 'Money Made Clear' section of the FSA website
If the calls persist, hang up.
If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme. The FSA can be contacted by completing an online form on their website.
Details of any share dealing facilities that the company endorses will be included in company mailings. More detailed information on this or similar activity can be found on the 'Money Made Clear' section of the FSA website:
http://www.moneymadeclear.fsa.gov.uk/news/scams/share_scams.html (opens in new window)