The FSA is warning of a "dramatic increase" in overseas fraudsters selling bogus shares using the names, registration details and addresses of FSA authorised firms and individuals.
In September last year, Royal London Asset Management (RLAM) and the FSA warned investors of a fraudster firm operating under the ‘Royal London Investment Group' banner.
The bogus firm had a website mimicking RLAM's, and claimed it was based at 33 Gracechurch Street, only a few doors down from the real RLAM offices at number 55.
RLAM contacted its lawyers in a bid to track down and remove the bogus website, which it says proposed "vague and strange" services.
Scammers are increasingly cloning authorised firms' websites but with a few subtle changes, such as a different phone number or false email addresses, the regulator warns.
Firms not registered with the FSA are not covered by the industry compensation scheme (FSCS), meaning anyone investing through an unauthorised business "is very likely" to lose their money if the firm goes bust or disappears, the FSA advises.
Anyone receiving an unsolicited call or email from a firm of which they are not a customer should ask for the firm's contact details, check the firm or individual's status on the FSA register, and call the firm back on the switchboard number on the FSA register to make sure the call came from the authorised firm.
Jonathan Phelan, head of the FSA's unauthorised business department, says: "Never deal with unauthorised firms. If somebody calls you out of the blue to promote shares, then you should be very wary of them even if they claim to be authorised by the FSA."
Share fraudsters, commonly known as ‘boiler rooms', usually contact people by telephone and use high pressure sales tactics to con investors into buying non-tradable, overpriced or even non-existent shares.
Boiler rooms are unauthorised, overseas-based companies with bogus UK addresses and phone lines routed abroad.
The FSA is advising people to report suspicious encounters as soon as possible by calling 0300 500 5000 or reporting it online.
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