Find out about the latest frauds and scams, how they work, and how you can avoid them.
Investors should be vigilant to potential scams targeted at shareholders in Irish and other public companies.
How share frauds/scams operate
These frauds, commonly referred to as “boiler room scams”, are operated by individuals and companies who contact investors unexpectedly and offer to buy their shares at prices higher than the market value. They can obtain investor information, such as address and shareholding details, by accessing shareholder lists which are required by Irish Company law to be made available. While “cold-calling” by telephone is the most common form of contact, they may also use email, post, face-to-face contact or approach investors at seminars.
These individuals often use high pressure sales tactics and tell investors that they need to make a quick decision or miss out n a deal which will give them a large return on their investment. The offer to purchase shares will likely come with a request for bank details or money up front as a bond or other form of security, which will be accompanied by a guarantee to pay back the money involved if the sale does not go ahead. This advance fee is part of the scam, investors are unlikely to hear from them again.
What to do if you’re contacted
Fraudsters will promise a large sum of money but one which will require funds. A person will receive a letter, an email, or fax that promises an “invoice,” “lottery prize,” or “bequest.” But only if they send “taxes” or “administration fees” first. The person will never receive the money they were promised.
Fraudsters will give out free scratch cards via newspapers or door-to-door distribution. The prize from the scratch card can only be retrieved via a premium rate phone call, from which they make their money. To check out whether a premium rate number is valid, contact www.comreg.ie.
Fraudsters write false cheques from your chequebook or intercept cheques which you have written and alter them. Fraudsters have also been known to use old unused chequebooks which you have discarded, or get access to cheques which you have signed in advance.
Over the Christmas period, cyber criminals will email fake invoices and delivery notifications appearing to come from legitimate courier companies. The emails will indicate that they were unable to deliver a package to your address and of course ask you to confirm your address and provide credit card details pay for delivery.
If the offer looks too good to be true it probably is. Beware of imitation goods for sale, most are sub standard, many are dangerous and in some cases lethal. Be especially careful when buying computers good such as laptops etc. In some cases they have come "preloaded" with key logging software. There are also lots of fake auctions and classified ad sites appear that over Christmas, make sure you are dealing with a genuine business.