According to the FSA, the number of unauthorised firms that have tried to get money out of unsuspect...
According to the FSA, the number of unauthorised firms that have tried to get money out of unsuspecting Uk investors has almost trebled in the past year.
This result comes as the FSA today publishes its new updated list of illegal firms.
Previous warnings regarding the problem were published by the City regulator last year and in 2000, both describing the tactics that are frequently used by these firms.
One of the latest scams commonly adopted by these "con firms" is to sell shares to an investor that are not listed on a recognised stock exchange, and thus almost impossible to get rid off.
Subsequently, this makes desperate investors an easy target as they are approached with an offer to sell their shares granted they pay an "administration fee" upfront.
However, once the payment has been made, investors never hear from the firm again leaving them both with less money and with the unsold shares.
As a result, investors get duped twice, the FSA says.
Other scams that are frequently applied to convince investors to pay out include pyramid schemes, where the only way to get your money back is to persuade others to put money in.
Also, among the more common ones are investment schemes, aiming at members of a specific group or social club, and letters or emails promising exorbitant rates of return.
"Dealing with unauthorised firms can seriously damage your wealth. You may be lucky and have no problems but if you do, you will have no complaints or compensation scheme to turn to and you could lose all your money," says Carol Sergeant, FSA Managing Director.
"Before deciding to deal with a firm, our advice is always to check with us whether a firm is authorised. It's up to you what you choose to do but you need to understand the risks you are taking."
However, the regulator says, it is not trying to imply that any of the firms listed would necessarily use such methods.
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