FSA's boiler room warning to shareholders

The details of more than 11,000 UK shareholders are on a fraudsters' database, warns UK regulator

LONDON - The Financial Services Authority (FSA) has warned about 11,000 UK shareholders that their personal details are on a database shared by fraudsters, which can be used to target people and illegally sell them shares.

Share fraudsters (also known as boiler room fraudsters) are often based overseas and use high-pressure sales techniques to target investors illegally, offering them non-tradable, overpriced or even non-existent shares.

The FSA wrote to the shareholders after acquiring the fraud database with their personal details including names, telephone numbers and addresses, from Canadian authorities. It is likely that the list - which fraudsters typically call a 'suckers list' - has been sold to a number of 'share fraud' gangs.

Shareholders and other consumers can avoid becoming victims of share fraud by:

• Checking that anyone offering to sell them shares is registered with the FSA;

• Calling the company back using the details in the FSA register to verify their authorisation;

• Reporting any company that cold calls them to sell shares, to the FSA; and

• Hanging up the telephone if the caller persists.

"This is a great example of how international co-operation can help protect people from falling victim to share fraud. The details on the database provide fraudsters with valuable information that can be used to convince people they are dealing with legitimate stockbrokers, in order to win their trust," said Jonathan Phelan, head of retail enforcement at the FSA. "These criminals sound authentic, are smooth talkers and can be very persistent. If anyone calls you out of the blue offering to sell shares, just hang up or you stand to lose a lot of money with very little hope of ever getting it back."

The FSA hosted the first ever boiler room conference in November to further encourage international co-operation in tackling share fraud. The conference was attended by representatives from international financial regulators, law enforcement agencies, the UK Government and the banking world.