Sunday, January 12, 2014

Beware the Imposter - Scam

This is a true story of an elaborate scam that happened while I was there.

The background. Some 10-12 years ago a friend of mine was working in a small hi-tech company and was offered shares in that company, which we shall call “HiTechCo”. He purchased 500 shares at £2 each and then watched them reduce in value until they were almost worthless. He then wrote them off and forgot about them.

Then, out of the blue, he receives a telephone call on a Saturday a couple of weeks ago. The caller identified himself with a name, which for these purposes we will refer to as Colin Smith, and from a well-known share registrar company, which we will call “Registri”. A telephone number appeared on caller display which was an 020 8114 number. His english was perfect and he was confident, just as you would expect someone in finance to be.

Colin explained that he was calling from home, as the offices are closed at the weekend, and that an offer had been made by a foreign company for the shares in HiTechCo. He also explained that my friend now held 39,000 shares due a “reverse split” and the offer was 14 pence per share - £5,460. He went on to also explain that my friend had been issued with 300,000 warrants and that these were also subject to the bid at 14 pence per warrant - £42,000. My friend said that he will dig out the paperwork and call him back.

At this point we both knew it was a scam. If anything sounds too good to be true then it almost certainly is. But we decided to play along for a bit. We Googled Registri and found it to be a legitimate and well respected company and on the contact page we found the details for one Colin Smith. But of course we didn’t know if we were talking to the real Colin Smith and we couldn’t call his office number as it was closed – convenient that isn’t it.

My friend called back and said please send the details by email which he did. And here we get to the classic scam. In order to sell the Warrants they first had to be activated at 2 pence per warrant which would cost my friend £6,000 and it all had to be done by the following weekend. The other telltale sign was the email address. These days business people have access to their work email account on a mobile device. The email address for the real Colin Smith on the Registri website was @registri.com but the one used by the scammer was @registri.atwork.com.

So, on Monday my friend telephoned the real Colin Smith to report it. It transpires that this sort of thing happens all the time and that there have been many cases where people have paid up and lost their money. Colin wasn’t too pleased, though, when my friend told him that the scammer had even used his LinkedIn profile, in fact he was quite perturbed by it.

So beware all you people out there. Check, check and check again.

2 comments:

  1. It happened to us too. Neil had a few worthless shares in Blacks Leisure for which a company based in New York professed to be willing to pay megabucks. Our contact was a very professional young lady with a Chinese name. We asked for confirmation in writing, which duly arrived with a London postmark and we immediately forwarded the letter to the FSA. Strangely, she never followed it up.

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  2. I'm surprised so many 'bitten' folks believe in fairy land and that elusive crock of gold! There is no Santa on the evening stage!

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