WE ALL know that if something seems too good to be true, then it probably is.
In the current climate, it is more important than ever to safeguard your investments as more predators attempt to get their hands on your hard-earned cash.
Scams can come in all shapes and sizes. One to be aware of is the boiler-room scam, perpetr
ated by small companies using high-pressure sales techniques to encourage investors to buy shares that have little or no value.
It is easy to believe you would just put the phone down, but when you are feeling strapped for cash this "get rich quick" call can seem to be just what you were holding out for.
In reality the very persuasive salesmen from these operations follow a well-crafted script that is designed to counter your every objection. They are incredibly persistent and have a record of success.
Another common scam is the advanced fee fraud – a request for assistance in transferring foreign money. All that is apparently required of you is the use of your bank account, into which impressively large sums of money will be transferred and then withdrawn, leaving behind a residue of between 10 and 20 per cent of the original sum. In reality what happens is that, just before the transfer takes place, you will be asked to pay an advance fee in order to set the deal up and prove your worth.
If you pay, you will never see your money again; instead you will receive a further demand for cash.
If you do not co-operate at this stage, your bank account will be emptied.
Phishing is another tactic used to extract money from your account. Have you ever received an e-mail from a bank about your account? These e-mails look extraordinarily authentic. Under no circumstances should you ever respond to any e-mail that asks you to authenticate, alter, prove, validate or verify your bank account information. A bona fide bank would never request this information by "cold calling" via the internet.
The Financial Services Authority (FSA) publishes useful information to enable you to detect unauthorised individuals, companies and overseas firms that operate in the UK, at www.fsa.gov.uk.
As well as listing non-authorised companies (boiler houses), the FSA lets you make a positive check on any company to see if it is authorised in the UK. You should check on this website before doing business with any financial institution.
The message is therefore to be on your guard and ignore all unsolicited goodies. Remember, it's your money, and as Harrison Baker wrote: "Money can't buy you love – but it certainly puts you in a wonderful bargaining position." So make sure you keep hold of what is yours.
• Alastair McLean is a divisional director at Brewin Dolphin.
The full article contains 482 words and appears in The Scotsman newspaper.
