The financial watchdog has contacted over 76,700 people targeted by 'boiler room' scams.
City regulator the Financial Services Authority (FSA) is writing to 76,732 people to warn them that they are being targeted by financial fraudsters.
Boiler rooms and land-banking
As part of a campaign dubbed 'Operation Bexley', the financial watchdog is sending this warning to people whose names appeared on lists recovered from companies that the FSA believes were fraudulently selling unauthorised investments.
These unlucky folk include those at risk of being duped by boiler rooms: high-pressure sales operations set up to lure investors into buying over-priced, worthless or non-existent shares. Other potential victims appeared on lists belonging to land-banking firms, which sell small plots of green-belt land to unsuspecting investors at sky-high prices.
Operation Bexley is the largest campaign of its kind, as the FSA has never before contacted so many victims in one go. These letters will start arriving through letterboxes from today, but 19,101 will be sent by email, as the FSA does not have the names and addresses of some targets.
To stagger this process, the FSA will send out 10,000 letters today, followed by 10,000 per week until every potential victim has been contacted. The first 5,000 emails will be sent on 30 April, followed by a further 5,000 each week.
Also, it's crucial to note that the FSA will not contact you for further information and will never ask for money, bank account or personal details. Hence, any follow-up contact is sure to be a sham.
Tips on avoiding scams
In its Operation Bexley leaflet, the FSA includes tips on how to spot scams and avoid becoming a victim, plus what to do if you have already handed over money to dubious companies.
Jonathan Phelan, the FSA’s head of unauthorised business, said:
"If you get a letter or email from the FSA over the next five or six weeks, please read it -- it could 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."
Getting help
The FSA has already set up a team to answer questions about the letter and on investment scams in general. This hotline number is 0845 155 6355. Also, these 10 banks have kindly agreed to provide advice for worried customers (callers should quote 'Operation Bexley'):
| Adam & Company | 020 7770 0015 |
| Bank of Scotland | 0845 606 2196 |
| Barclays | 0800 051 6195 |
| The Co-Operative Bank | 0845 602 9402 |
| Coutts & Co | 020 7770 0011 |
| Halifax | 0845 601 6954 |
| HSBC | 0845 600 9961 |
| Lloyds TSB | 0845 600 1928 |
| NatWest | 0845 605 0789 (overseas +44 870 243 0464) |
| Royal Bank of Scotland | 0845 600 8212 or 0131 317 4597 |
Those who have already put money into these iffy investments should contact the FSA directly by telephone or via the online reporting form for Operation Bexley.
Too good to be true
The FSA goes on to warn all investors:
"These lists are nothing more than fraudsters' phone books and the people that use them are ruthless, calculating 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 sceptical."
Such scams often have these three hallmarks in common:
1. Contacting you 'out of the blue';
2. Promising fat returns with little or no risk; and
3. Being vague about how these outsized returns are made.
If you are approached by any company offering you high returns on your money, then always check the firm's status on the FSA Register. Also, call the company on the switchboard number provided by the FSA to ensure that the call did indeed come from a legitimate, authorised firm.
In addition, check to see if the firm is on the FSA’s warning list. If in doubt, seek advice from a trusted professional, such as a solicitor or independent financial adviser.
Finally, do remember that 'get rich quick' schemes that sound too good to be true are almost always bogus!
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