The Financial Services Authority is contacting tens of thousands of people after recovering a “master list” of potential victims held by “boiler room” share fraudsters.
The FSA is writing to more than 49,000 people whose names, addresses and telephone numbers were on the list with most targets in London, although there were a “significant number” based in Scotland and the South East of England.
The regulator believes the list is still in use by fraudsters operating in the UK and abroad and is likely to have been circulated between different boiler room networks.
Boiler rooms are so-called because of the high pressure techniques their operators use to convince victims to buy shares, which are worthless, non existent or non-tradable. The average loss to victims of these scams is £20,000, with targets typically cold called by the fraudsters who have fake UK address but are actually based overseas.
“This latest list is the biggest we’ve ever recovered and we are contacting every single person on it in the hope we can stop people losing money,” said Margaret Cole, the FSA’s managing director of enforcement and financial crime.
“Even if only one in ten we contact heed our warning it could mean around £96m is not invested in these scams”.
The FSA has so far this year contacted 95,000 people across the UK to warn them about the risks of investing in boiler room scams.
The cost of boiler room fraud in the UK is estimated to be £200m per year. In 2010 to date, the FSA has received around 4,000 calls a year from people who have been contacted by boiler rooms.
The the latest “master” list was recovered via the FSA’s ongoing intelligence work with counterparts in the United States, Homeland Security Investigations (formerly known as Immigration & Customs Enforcement), and the Internal Revenue Service - Criminal Investigation (IRS-CI).
Consumers are being advised to hang up the telephone if they receive an out of the blue call offering them shares. People can also check the FSA Register to see if the person selling shares is authorised to do so.
Investors should also report any company that cold calls them to sell shares to the FSA consumer helpline 0845 606 1234 or the police.