New scam targets Irish share owners

People who own shares have been warned about a rise in boiler-room scams.

This is where fraudsters offer to buy their shares at a higher price than they are trading at on markets, in a bid to gain access to shareholders’ bank accounts.

The Irish Stock Exchange and the Central Bank have warned investors to be alert.

Using data culled from share registers, fraudsters are contacting shareholders out of the blue offering to buy their shares at inflated prices.

Shareholders in firms quoted on the Dublin market have been receiving authentic-looking correspondence in the last few weeks, it has emerged.

One piece of correspondence seen by this newspaper was from a firm that the Irish Stock Exchange was not authorised to operate in this country.

Asked about the scam, the Irish Stock Exchange (ISE) said: “Investors are reminded to be vigilant. If it sounds too good to be true, it probably is.”

The spokeswoman said the ISE has seen a few cases recently of what are known as boiler-room scams.

She denied fraudsters had hacked share registers, and said the thieves were able to access the registers as they are publicly available.

The scams are often run from “boiler rooms” where fraudsters cold-call investors offering them worthless, overpriced or even non-existent shares, or offer to buy real shares at inflated prices.

They promise high returns, but those who invest usually lose their money.

The ISE added: “These unauthorised individuals and companies obtain investor information and contact details by accessing publicly available shareholder lists.

“While cold-calling by phone is the most common form of contact they may also use email, post, face-to-face contact or approach investors at seminars.”

These individuals often use high-pressure sales tactics and tell investors that they need to make a quick decision or miss out on a deal which will give them a large return.

The offer to purchase shares will likely come with a request for bank details, or money up front as a bond or other form of security. This advance fee is part of the scam.

It is not known how many people have fallen victim to these boiler-room scams.

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