From time to time we receive calls from clients concerned that they have received unsolicited calls from brokers trying to win their business.

This unethical practice is frequently carried out by unregulated or overseas brokers and unfortunately it appears UK investors have been targeted across the industry. The FCA is aware of this practice and warns against dealing with such firms, or “Boiler Rooms” as they more commonly known, as investors will not get the protection of the UK compensation and complaint schemes.

What happens?

These shares sales frauds typically start with a phone call from a person posing as a salesperson for shares in companies you are unlikely to have heard of.

Shares sales fraudsters tend to be very persistent and can be very convincing – even providing authentic-looking websites and information for the company shares they are selling. They will frequently offer gifts and free reports and will often succeed by wearing down the investor until they eventually agree to invest.

If you fall foul of this particular type of fraud there is unfortunately little chance of compensation and you are almost certain to lose any money invested. These scams are almost always operated from foreign countries (whatever the salesperson says). This means the fraudsters are not regulated by an authority which might protect or provide compensation for the victim.

What you can do to protect yourself

You should be particularly cautious if any approach to sell investments directly to you is unsolicited, you are being offered unrealistically high returns on investments, and/or you are asked to keep the approach confidential.

You should always check the validity of any scheme you intend to invest in. Pay particular attention if you find it difficult or impossible to get hold of any real evidence of the scheme’s legitimacy, or find that telephone numbers are untraceable mobile/cell numbers.

If you think you may have been approached by a fraudulent sales person you can check on the FCA website to see if the company they claim to be from is legitimate.

If you have any suspicions, you should check with the relevant authority that the company the salesperson claims to represent is on a regulator’s register – and that it is allowed to give financial advice and to make investment sales. If it is not, of you are unable to find this information, you should ignore or terminate any future calls.

Even if the company is on a register, you should not assume that the salesperson actually works for that company. Do your own independent checks and call the firm the salesperson claims to work for on a number not given by the salesperson. Any genuine salesperson will not mind a customer undertaking their own checks.

We would like to reassure our clients that Beaufort Securities operates strict Client Confidentiality and Data Protection policies and under no circumstances do we ever improperly disclose confidential information or data about our clients. If you are contacted by such persons, however, please let us know about it immediately. Alternatively, the FCA’s website provides a list of unauthorised firms, individuals and investment scams – click here to visit the FCA website.

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