Investment fraud
Many items are sold as investments, such as paintings, jewellery, expensive wines, stocks and shares. There are also many ways to dupe would-be investors into buying ordinary goods at inflated prices.
Most frauds involve the unsolicited offer of higher than normal returns on ‘investments’, be they shares, wines or whatever. The offer is usually couched in terms of ‘special, rare, once in a lifetime’, and invariably the contents of any communication should be kept ‘confidential’, otherwise the offer is invalid. This last condition not only ensures that the fraud is kept secret but, is also a means of suggesting to the potential victim, that they can get in on the ground floor of a huge money making scheme.
The operators of these scams are well-practised telesales people with the gift of persuasion, which is of course the first requirement of any confidence trickster.
Concealing information
In the case of shares, very often the ‘shares’ in question are linked to a non-existent company, invariably in America. Being in another country makes it difficult to get genuine information on the company concerned. This of course helps the fraudster to conceal the very information that the investor needs, in order to make an informed decision on whether to invest or not.
When the investor realises that things are not adding up, the next and final stage of the fraud is put into operation. Out of the blue, an ‘investment broker’ will contact the investor and offer to sell the ‘shares’ at a very favourable price, but not before an up-front fee is paid. This is the icing on the cake as far as the fraudster is concerned. For the unfortunate investor if he takes the bait a second time, this is just another nail in his financial coffin.
Points to take note of:
- Beware of unsolicited offers particularly by phone or e-mail.
- Be very aware if an offer is to be kept confidential.
- Offers that seem too good to be true, usually are.
- If contact with the ‘investment broker’ is only by mobile phone or e-mail, be very cautious. Communication by e-mail or mobile phone can be made from anywhere in the world. Fraudsters will choose those countries that have either tolerant or non-existent financial regulations to operate out of.
If you feel that you have been contacted by scam operators, or if you have bought into any of their schemes, you can report them to: - www.consumerdirect.gov.uk/goods-services/scams