Man loses �500,000 in stock scam

Several people in the Lothians have been targeted

A Lothian man has been conned out of �500,000 by bogus stockbrokers who pressure their victims into buying worthless shares, it has emerged.

A 77-year-old man in the area has also lost �150,000 in what is known as a "boiler room" fraud.

The scam takes its name from the high pressure placed on the victims.

Lothian and Borders Police are warning people to be on their guard for the bogus stockbrokers, who are usually based overseas.

Their favourite targets are middle-aged men with previous experience of buying shares, whose names they find on share registers.

The most common victims of boiler room scams are experienced investors, who typically lose about �20,000 each to the fraudsters.

Once they have taken a lot of your money they stop calling and you can't get hold of them Det Insp Jim Gilchrist Lothian and Borders Police Q&A: Boiler room scams

Det Insp Jim Gilchrist, of Lothian and Borders Police, said the scam had been on the increase, with 10 reports in the Lothians in the last few months.

He said: "This is a very professional scam. They send out proper looking statements, authentic brochures and assign you a personal advisor whose name and picture you can see in the documents they send.

"They start off by pretending to invest a small amount into shares for you and then work with you over a period of months, telling you of a really good opportunity.

"Once they have taken a lot of your money they stop calling and you can't get hold of them.

"It's the same old story, if something sounds too good to be true, it usually is.

"We would advise anyone wishing to trade in stocks and shares to use a reputable registered stockbroker, based locally, and to do some thorough research before parting with any money."

The scam artists, who often hail from the UK, phone from all over Europe as well as Hong Kong.

They often offer a British address and have even been known to use tapes of office noise in the background of calls so it sounds like they are calling from a big organisation.

E-mail this to a friend

Printable version