The fund recovery scam
Tony Levene gets a phonecall from an American scammer, promising him financial salvation.
A guy with an American accent calls. He tells me he works for a firm whose details and name he can't give me until I sign up as a client.
“So why should I become a client if I don't know who I am dealing with?” I query.
“You're not the first person to ask that,” he replies. “But to put you at your ease, our firm was founded in 2008 by President George W Bush with the support of the World Trade Organization, the World Bank and the Wall Street Journal.”
So what was this firm that former president Bush could take time off from the White House to set up? And what has all this to do with me? After all, he knew my name and phone number.
He told me the firm was into “fund recovery”, working “in conjunction with a network of accredited financial institutions, banks, brokerage firms, and legal and tax professionals throughout the world”.
Cold-calling is banned in the UK
Well, obviously none of these firms can be in the UK, where investment cold-calling is banned. So bang goes investor protection.
He informed me I had bought “about five or six years ago” a share or a fund which I had either forgotten about or that I must have thought was worthless.
Unsurprisingly, I asked the name of the share or fund which I had forgotten – perhaps to nudge my memory. He said he had about 200 on his list so he started to rattle them off. After hearing some 50 – mostly variations on common words such a mining, technology, consolidated, group, assets, property, in other words typical boiler room stocks – he admitted that he did not know the name of the stock which I was supposed to hold.
He would put me in touch with licensed brokers in the US who were the only ones who could free up my money once I became a client. So how much would this cost?
He could not tell me but he assured me his firm was a “not for profit” organisation. This is always an interesting phrase as it does not preclude those working there from paying themselves majestically – and giving themselves huge commissions and bonuses on top. Payments to staff are made before profits are declared.
He assured me his list could not be wrong – and that only the brokers he represented could recover my money.
The only road to financial salvation?
“Why couldn't I sell through a UK stockbroker?” - a not unreasonable question.
“It would be against US law,” came the reply. I argued that this was not true – after all UK investors deal through brokers every day in Exxon, Coca-Cola, Microsoft, Apple and many others. But he insisted that his was the only road to my financial salvation.
He added: “As we are a non-profit organisation, we are required to work incredibly cost-efficiently, meaning that we do not have the luxury of time to follow up with you regarding the submission of your paperwork.”
Finally, he conceded that my name could have been on a share register even though I had never bought the shares.
“You probably expressed interest in the shares so your details were added to the register ahead of receiving payment,” he helpfully explained. What a strange register where purchasers and non-purchasers are equally represented.
What’s going on here?
This is a new variant of the “recovery room” scam. In the classic version, a boiler room calls a previous victim posing as a broker acting for an undisclosed party which wants to take over your worthless shares at a huge profit. The only snag in return for this good news is you have to pay an upfront fee – typically £5,000 or more. There is, of course, no takeover and you have thrown good money after bad.
In this variation, the recovery room has a list of potential victims – it does not know the shares. So the scam is either to persuade investors that they might have bought shares that they have forgotten or to persuade them to reveal the name. Once that happens, they'll be told “good news” (as above) and asked to send the money for “legal costs” or “brokerage fees”. Whatever the story, this is bad news.
And my protestations that I held no shares were ignored. About a minute later, an email arrived with; “Following your conversation with myself today, please find enclosed the relevant documents for you to fill in and return, along with a copy of a Limited Power of Attorney which I will need returned to allow us to carry out research and to verify your holdings. “
Follow me on twitter @tonylevene1
Read more posts from Tony Levene’s blog
Most Recent
Comments
-
Remember that criminals have no scruples, no morale code, and see everyone as a target. Don't expect any form of protection from the authorities because unless you're someone like Simon Cowell, or one of the other well to do celebrities, the authorities just don't want to know. Basically, two people can get electrocuted. One is the daughter of a working class man of no repute. The accident gets classed as just that, an unfortunate accident. The other is the daughter of an MP. She uses her power to get the law changed, and introduces additional legislation that makes the job of the honest tradesman much, much, harder. Two people get run over by a hit and run driver. The young lad who got mowed down has the accident report filled in by the police. They make a half hearted attempt to identify the hit and run driver, but give up when they realise that it will cost more to investigate than they have budgeted for. The second young man is Prince William. Scotland Yard are called in, as well as several arms of the military intelligence. There is public outcry at the death of the Prince. Detailed house searches are conducted, and thousands of people are interrogated. Interpol help in the capture of the git who killed our future monarch. A bit far fetched? Probably, but it does point to the simple fact that if you are working class, the police will only give genuine help if the crime is murder. If it is something simpler like burglary, it costs more to investigate than they are prepared to commit. If the victim, on the other hand, is someone of note, or a wealthy individual with influence, then the police will do their utmost to track the culprit. (A point to note is my old neighbour, who was never sober when driving his car, but never ever got pulled by the police, mainly due to him knowing the chief constable and supplying the police with flowers from his nursery.) Always remember one golden rule. The rich are rich because, in many cases, they are as deceptive as the scammers who want to be rich. Anyone who can employ others and pay them a pittance for grafting, while denying them their basic rights under current employment laws, is no better than the boiler room boys. Boiler room scams are designed by the very same people who, under different circumstances, would be running a sweat shop. It takes a certain type of person to steal from others without conscience, and these are also the type of person who wouldn't flinch if they needed to take your life. They have no conscience and no morales. So, the only protection yo have is yourself. You cannot rely on the authorities to protect you. You can only rely on yourself. Armed with the information that people like Tony Levine furnish us with should be enough, but be warned, dealing with bona fide companies can also prove dangerous. Companies can still fold, and once honest salesmen can still become dishonest when faced with that sort of news. The moral of the story is this. Either live your life poor and be immune to someone trying to steal the money you don't have, or be savvy enough to do everything within your power to protect the money you do have. Even then, someone somewhere will find a way to steal that money from you. It will probably be your bank manager when he gives himself a massive bonus, just before the bank is declared bankrupt.
REPORT This comment has been reported. -
If a scheme look too good to be true then it almost certainly is. Anyone who gives money up front to a cold caller from a company he is not prepared to name for a dubious purpose deserves everything they get. The best way to deal with such callers is not to speak to them, and put the phone down as soon as you realise what is going on.
REPORT This comment has been reported. -
debtfix, loved it! I may use the nurse one myself, the best i managed was to get one of them to accuse me of being an alien before they hung up- long story.
REPORT This comment has been reported.
Do you want to comment on this article? You need to be signed in for this feature
04 September 2011