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Scam watch: the share-buying phone scam

Telephone with scamwatch email

Well-informed fraudsters are targeting investors in a seemingly sophisticated share scam. Here’s how one Which? member was almost caught out by a share-buying telephone scam.

The Which? member told us: I have been the target of an international telephone share scam involving a fictitious hostile takeover. The caller knew my full name and that I had purchased shares in a certain company back in 2001.

He claimed I had a registered holding of ‘incentive shares’ in this company, credited because I was a long-term shareholder, and that he was representing a client that wished to mount a hostile takeover of this company.

He asked if I would be willing to sell my shares at between £10 and £15 per share, which I said that I would be willing to do.

I was soon contacted by another client who told me that the sale and purchase would proceed via a ‘transfer agent’, but part of the transaction involved an insurance bond by both parties where I would need to put up almost £5,000.

I was already suspicious, but at this point I knew the whole deal was fraudulent.

This was a remarkably sophisticated fraud attempt, involving apparently legitimate companies, with company logos, legitimate telephone numbers, and plausible looking web sites. I would like to prevent anyone becoming a victim.

Our say on investment scams

These companies may have put a bit of effort into appearing legitimate, but anyone who calls you out of the blue about an investment opportunity is almost certainly a fraudster.

These scammers are likely to have obtained most of your details from the shareholders’ register.

Those who want to double-check the legitimacy of a financial company should check if it is listed on the FCA’s Financial Services Register.

Anyone who is contacted by an unregulated firm, as you were, should report the companies involved to the FCA and Action Fraud.

Have you been a victim of this scam or a similar one? Do you have any tips for spotting an unregulated firm?

adele says:
22 February 2018

It is now 2018 and this exact scam -hostile bid – offering to pay a premium with a high multiple for the shares. non-disclosure agreement, insurance bond to be paid upfront, is still up and running. Superficially credible web-site but on investigation was only created three weeks ago.

mike says:
25 April 2018

I have been contacted twice with a similar thing, once in December & again today.
These guys are offering to buy Telephonica shares (that I don’t have).
The story is that they are buying them as part of a hostile takeover & would first need me to sign a non disclosure agreement.

AGL says:
27 April 2018

Just been contacted by company in Seattle seeking Maverick Entertainment Shares.
Offering very high price for me to sign them over to them. (SCAM) want me to sign the Non Disclosure form and post an Insurance Bond. Just waiting for the details so I can inform the authorities and hopefully get it shutdown.