The dangerous new form of the pump and dump scam

These scammers don't just want to flog you dodgy shares. They want to get a grip on your personal details too!

It's pump and dump time again. Those friendly folk who offer such amazingly enticing stock market tips have emerged anew out of the woodwork. Their task is to turn your savings into their bank balance.

But this time it could be even more sinister – they could be trying to get into your computer to steal personal and financial details as well.

I've had a sudden spate of emails from people I don't know and, from the extent of information I can glean from what they send, I'm never likely to know anyway. It's unlikely they exist at all other than in some spammer's imagination.

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The odd thing is that the contents of all these missives are virtually the same whether they are headed “market analyst”, “investment action” "Wall Street Report” or any other mix'n'match variation on these words.

Here's what they all say:

Dear Future Subscribers,

We have a track record of alerting our subscribers to triple % gainers, before the rest of the market is alerted. This newsletter explains to subscribers the major plays every week. You might not trade every pick, but you will keep an eye on every pick. These are serious companies that should be on your radar. Sign up today and be first to this insider info.

Please Visit .. http://t.co/xxxxxx

This is a limited time chance to join our newsletter completely free. Do not miss out!

There is no signature. Anyone can, of course, have as many email accounts as they wish and there is no need to use real names to sign up. So it is unlikely that Rus Corina or Marco Grilo or any of the other unlikely names exist. And some of the letters have those paragraphs of meaningless prose designed to get around spam filters.

Like most spam, the English is not exactly prize-winning. I am not sure what a “triple % gainer” is – it could be three times 1% which is not too difficult.

The pump and dump

They hope their so-called newsletters or investment magazines will persuade you to buy the shares they recommend in glowing terms – that's the “pump”. The companies they describe as “serious” are seriously flawed - some are so corrupt that they don't exist other than on paper, while the better ones have a grossly overvalued existence.

Once they take your money, the price of the shares will be raised to convince you to put in even more. But if the stock is a total phoney, you've lost your money, and if it's an overvalued semi-phoney, they sell them fast to other mugs – that's the “dump”. In the second case, you've also lost your money.

Where there's a tip, there's a tap

Why otherwise would they be offering a free newsletter? There are proper share tipsters – some regulated by the FSA - out there who charge big bucks for their thoughts. So remember the old stock market adage: “Where there's a tip, there's a tap.”

That means that whenever someone gives you an investment tip, you should ask yourself why? Do they have a tap to open with stocks to sell or funds to flog? The saying is an old fashioned way of warning against pump and dump operations.

There is nothing new here – other than the technology. So I try the website (I've changed it to prevent you looking and possibly harming yourself or your computer). The t.co bit is an association with Twitter. And Twitter won't let me look at it!

It says “The site you were trying to visit may be unsafe.” It could be “potentially harmful, have forgeries, download malicious software or be a spam site that requests personal information”.

The spammers don't just want to sell you phoney shares, but also get into your machine from where they can steal passwords and bank account details. That way they'll make sure that whatever they don't get from you for the rubbish shares, they'll get by theft.

But then why do these people set up sites via twitter when it is clear that twitter is good at closing them down? Worryingly amateurish.

It could be, of course, that I should not be reading these emails anyway. When I look again, I notice that they are not addressed to me. Instead there is a “tony leonard” and a “tony leung” and a “tony levy” - perhaps these people get garbage addressed to Tony Levene.