Another Sly Tactic From The Scamming Offshore Brokers
December 2005
The Offshore Brokers are up to their dirty tricks again using a cynical new tactic.
Offshore Brokers are the companies that cold-call you offering 'hot-tips' on small stocks or products like futures and options. Basically they prey on the built-in greed within all of us. A typical telephone call will offer to sell you some shares in a little known US technology company at say $0.50 and you'll be told that the share price is sure to go 'to at least $5 within a few months'. But if you ever invest there's a 99% chance that your money will disappear along with the brokerage company which never actually existed in the first place.
No Regulation Is Their Achilles Heel
The internet has been a great friend to many would be investors in that they now have an avenue in which to do some background checking into the cold-calling firms. And on many message boards those who have been scammed in the past are talking about their experiences which is an instant red flag. Google therefore can tell one a lot.
One of the main problems that the offshore brokers have is that they're not registered with organisations like the Financial Services Authority (FSA). They have therefore resorted to tricks like inventing their own Regulator, as discussed on this website in these articles -
A Dirty New Tactic Is Born
The new trick is simple.
Many of the offshore brokers are now calling themselves after actual FSA regulated firms AND the super-smooth salesman you'll be talking to is named after an FSA registered person within that company. So if you call up the FSA to check both the firm and salesman out the FSA will confirm you're dealing with a 100% legitimate company.
Of course, when you try and transfer money to them you'll be asked to transfer offshore and to a bank account name that is not the same as the FSA registered firm. But don't worry if you question this, the scammers will have a silky smooth excuse to make it sound very plausible.
So what to do?
1) If you ever get cold called about a hot investment or something that is sure to make you some quick and easy money then 99% it's a scam
2) Always check out the firm and name of the salesman with the FSA (hotline number 0845 606 1234) BUT then call the firm back on the main switchboard number that is listed on the FSA's website - What ever you do, DO NOT call back the potential scamming company on the number that the salesman first called you on
3) Finally, if a deal looks too good to be true (especially if a stranger calls you) then again there's a 99% chance that it's a scam
Summary
Watch out for these kinds of tricks involving the offshore brokers. There are going to be more tricks over the next few years in trying to lead prospective investors into thinking that they're dealing with financial proper and regulated firms. Follow our simple guideline and you won't go far wrong.
See Also
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