Protect your money

It should not really be necessary to write this article, but there are so many people out there after your money, that it is probably a good idea to pass on a warning from the Financial Services Authority.

A warning from the regulator

Since the introduction of regulation within the finance services sector, back in 1988, there has been a background of criminality that has been acting as a running sore within the industry. Well, actually, it is outside the industry, but it can affect just about any investor.

It is important to note that the criminals – and there is no other way to describe them – are not part of the financial services sector and are most certainly not authorised and regulated by the Financial Services Authority (FSA).

Who are they?
These people generally operate from outside the UK – although this is not always apparent as their telephone calls can sound ‘domestic’ and e-mails may appear to come from a perfectly legitimate source in this country.

They may even have a perfectly legitimate looking website. But they are criminals and, sophisticated as they might be, it is usually fairly easy to spot them.

The key point is to check that any caller is FSA registered. Ask for their number and put it into the listing facility on the FSA website. This will give you their full contact details, including a telephone number and, importantly, their correct website domain name.

According to the FSA, some of the criminals’ websites look very convincing and have fake e-mail addresses and telephone details. What they cannot do is to replicate the precise web address, so if the site to which a telephone caller or e-mail message directs you (and it will not always be the address you see in an e-mail) is even slightly different from the one on the FSA’s register, DO NOT TRUST IT.

Boiler Room Scams – what are they?
We have written before about “phishing”, which is a method by which criminals try to find your bank details by asking you to log into a website to “renew” your password, or offer you the chance to make millions as a commission for accepting, and then forwarding, a money transfer for them (which is highly illegal in any event).

The current warning relates to what are called Boiler Room Scams. They basically work on the (perhaps false) premise that everyone likes to be given an “inside” investment tip from time to time, so that they can make a little extra money.

A rather persistent telephone call will come from a sales person who has often been “given your name” by a friend (also known as the telephone directory) so that you can benefit from a really special deal. This will relate to non-tradable, overpriced or even non-existent shares that they have for sale.

If you part with your money, you will never see it again. In a new version of the scam, you might even be invited later to pay a significant amount of money to a “different” firm that will get your money back for you. You will never see this, either.

Not all criminals enter through the windows

How can you avoid getting caught?
There is so much of this going on that the FSA has a dedicated department dealing with unauthorised business. It points out that, because these criminals are not regulated, neither are monies paid to them covered by the Financial Services Compensation Scheme.

The simple rules are:

• Obtain and check with the FSA the contact details given to you - if they are not listed, or the details do not tally, avoid all contact with them;
• Never part with personal or financial information to anyone you do not know and trust; and
• Never expect something for nothing.

SDB Strategic Planners Ltd is regulated by the FSA and has to comply with very high standards relating to financial probity and the way advice is given.

It is important to take professional advice before making any decision relating to your personal finances. As ever, the value of investments is not guaranteed and will fluctuate; you may get back less than you put in.

NOTHING CONTAINED IN THE ARTICLE SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE. PLEASE NOTE THAT THERE MAY BE VARIATIONS FOR THOSE LIVING IN SCOTLAND AND NORTHERN IRELAND. 

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