Cold-calling scammers want to sell me 'shares' in Lloyds Banking Group

The call comes from someone claiming to work for Lloyds, and the name checks out. But it's still just a scammer trying to flog me dodgy shares.

Lloyds Banking Group released results covering the first nine months of this year on Thursday. The group, partly taxpayer-owned and trading under Lloyds TSB, Halifax, Bank of Scotland, Scottish Widows and other high street names, is still reeling from the banking crisis. It also has a rapidly rising bill for payment protection insurance (PPI) mis-selling, setting aside another billion pounds for PPI compensation.

All very interesting, and with the shares up 1p to 41.6p immediately afterwards, the results were doubtless pored over by Lloyds shareholders who want to see if there are the glimmers of a return to the good old days of dividends and a £5 plus equity value.

So what has this to do with my scamblog? Lloyds Banking Group shares may be more than 90% down since 2007, but bad things happen. It is not a scam. It is totally transparent. It is dissected by huge teams of analysts and written about by some of the sharpest journalists on the block. Its own quarterly and annual reports reveal so much information that, short of a directorship, it would be difficult to know more.

Now for my confession. I hold a very tiny amount of shares in Lloyds Banking Group (and I'm on the public share register). Cashing them in would net about enough to buy a fish and chips supper for my immediate family. I regard them in the same way as my equally tiny number of Premium Bonds – there's always hope. But I really don't think much about them. There's not a lot I can do.

Nevertheless, there's someone who thinks I could profit.

"Honestly, I'm not selling shares"

On Monday – a few days before the results – I was phoned by someone called David who said he was from LBG.

“LBG? What's that?” I naturally asked – I really had no idea. David clarified, telling me he was from Lloyds Banking Group and he had important information for shareholders like me.

He immediately reassured me saying that he was “not selling shares”.

Instead, David was “going out with a fourth quarter recommendation” which he would email to me and, if I liked the concept, he would send paperwork by Federal Express for me to sign, and presumably return with my cheque.

Who is David?

I have not given David's surname because his name happens to be exactly the same as someone in Lloyds' internal telephone directory. This may be pure coincidence as the surname is relatively common and Lloyds has 100,000 plus staff.

The likelihood, however, is more sinister.  “Borrowing” the identity of someone who works for a nationally respected organisation is, as has been seen before, an excellent route to credibility.

Some names are on the FSA register, others are culled from newspaper articles. Some financial firms encourage employees to write a column for local media, while it could also come from a business card. Other options include hacking into the internal staff list or a finding a disgruntled employee to steal it.

Besides the tell-tale boiler room background buzz on my call – you can always hear the others in the operation making similar calls because scamsters don't bother with sound-proofing the cheap premises they rent - there are clear reasons why David was a fraudster trying to steal my savings. No listed company – and he claimed to be from Lloyds Banking Group – ever calls investors with advice. 

And that, if for no other reason, is because it is banned by law, the FSA and the Stock Exchange authorities.

Investor helplines such as how to change the name on a share certificate always make it clear that they can discuss the mechanics but not whether it is a good idea. There is no circumstance where the quoted group would itself initiate a phone conversation.

No guarantees with shares

Based on experience of never-changing boiler room scripts, when David or his “senior analyst” gets around to phoning me again – it could be days or months or never – what he will say is that Lloyds Banking Group shares have fallen more than 90% since their better days. It's true and a real fact is always essential as a starting point for scamming fantasy.

So he will offer me shares which are “guaranteed” to double or treble over the next six to twelve months.  All I have to do is to send the money!  He has already asked me “are you liquid for £10,000?” and as I lied “yes”, he “knows” that I have that sum raring to go.

Of course, no one can guarantee anything about shares – but I am pretty confident that the equities David will try to sell will be phoney.

Lloyds Banking Group says it continually warns shareholders against these and similar approaches. So too do most other major UK companies.

But that does not stop attempts. After all, if a phone-based fraudster can work through 2,500 shareholders a week from lists and hits just one for £10,000 with negligible risk of punishment, it's a lot easier - and more lucrative - than burgling homes.

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