I took a call last week from a smart gentleman looking for help regarding a possible investment scam he had fallen for a few years ago. He suspected someone was trying to scam him but his fear of missing out (FOMO) was driving away his rational thoughts and concerns.
It all started a couple of years ago when he bought some shares in an American tech company, I won’t name the company as the caller asked me not to. He followed the stock and initially it performed well, there was good news flow and he felt happy with his investment.
At this stage I asked who sold him the shares? He replied it was cold call but he had received a share certificate and wasn’t worried about this. He was a regular investor in shares and had no reason to feel uncomfortable.
Unfortunately, things went badly for the company and it was eventually delisted. This happens when shares have negligible value, or the company is taken private, or ceases to exist.
Sometime later the gentleman was contacted by a “Japanese buyout firm” who wanted to buy the company he had invested him and they would be paying him a good return on his investment. This sounded great but eventually he stopped hearing from them.
Earlier this year he was contacted again, this time by the US Liquidations Compensations Dept. The great news was that his $20k investment was now worth $107,000 and all he had to do was put $6,400 in an escrow account for the funds to be released.
As I had this conversation, several alarm bells were ringing. Firstly, anything bought from a cold call and particularly an investment is highly suspicious. I have been an active investor for 30 years and don’t think I have seen a share certificate for 25 of those years. Also, there are very few Japanese buyout firms in the world and those that exist would not be looking at a company like this.
Then I had a look at the US Liquidations Compensations Dept website, its almost plausible, but the quality of font etc just are not good enough, the information is very superficial and then if you investigate the domain name registration, its registered in Panama, this would be extremely unusual for a US Government agency! The content is almost identical to another company called US Liquidations Compensation Board.
If this was not enough, in 30 years of investing, 20 years of which working for investment banks I could not see a circumstance where one would have to deposit money to receive money, potentially to fund a lawsuit if a group of investors were launching one, but otherwise no way. The word escrow is also one frequently used to confuse people and convey safety, yes true escrow can keep you safe but when you send money to an account number, would you know? Fraudsters love using the term escrow and it is often a giveaway.
The gentleman knew a lot about investments and US Securities Exchange Commission etc. Unfortunately, I had to tell him that it looked to me like he had been scammed several years ago and the scammers kept coming back. I am unconvinced he ever actually owned any real shares, as I said its very unusual for shares not to be electronically registered these days, instead of share certificates being issued. The fraudsters tried to come back a few years later to take some more but I suspect the scam was getting attention and they pulled away from it, only to return this year.
With the help of an okay looking website and a good web address they put together a convincing story that for a mere $6,000 he could release $107,000. Unfortunately, it was only a story and a criminal one at that.
I’m sure the caller knew this but was convincing himself it was a winning lottery ticket, it was however never going to be a lottery ticket; after all someone has a chance to win the lottery but there was no way he could win in this scenario.
The lessons from this for all of us are simple:
– Never buy anything from a cold call
– If it sounds to good to be true, it’s not true
– Fraudsters love to come back to the same victims
– If you’re worried give us a call on 0800 888 6400
Reassura is dedicated to helping raise awareness of scams and fraud and the impact they have on their victims. Reassura’s team of specialist anti-fraud advisors are on-hand to offer advice designed to help individuals make better informed decisions and avoid the unpleasant consequences of becoming a victim. For further information visit: https://reassura.com or call 0800 888 6400