by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Expat Investor : January February 2009
EXPAT NEWS Call for international cooperation to bust boiler rooms need to provide credible deterrence against these criminal operations and I’m convinced that by working in partnership, together we can make a real impact.” Each year, around 30,000 people fall victim to boiler rooms in the UK alone – estimates put the total fraud at £300 million. Typically, victims can be ‘groomed’ over weeks or months by fraudsters who call them regularly, eventually persuading them to buy worthless shares. The problem is global. Boiler rooms are based overseas, often in Spain, Hong Kong or North America. But their victims tend to be in the UK, Germany, United States and Scandinavia. The FSA has launched a number of initiatives to help raise awareness of boiler rooms. These include: ? working with the Institute of Chartered Secretaries and Administrators to urge listed companies to send warnings about boiler rooms to their shareholders. ? working with APCIMS, the stock broking trade association on a leaflet for its members to give to customers warning them about boiler room fraud. ? improving the information given to consumers about boiler room fraud through its website www.moneymadeclear.fsa.gov. uk. In the past 18 months, the FSA has also taken action against seven entities for acting as or assisting boiler rooms, including taking out injunctions, freezing assets, making people bankrupt and starting criminal investigations. Last year, the FSA helped refund around £1 million to UK investors. The FSA says anyone who has been cold called by companies offering to sell them shares can report this to the FSA by calling its consumer helpline 0845 606 1234 or by using the online form available on its consumer website. Boiler rooms target investors in several ways: ? High-pressure cold-calling to offer attractive share opportunities. ? Selling at inflated prices US The UK’s Financial Services Authority (FSA) has called on regulators and law enforcement agencies from around the world, including the US Securities and Exchange Commission and the Spanish and German regulators, to help tackle a fraud that reaps about £300 million yearly from the UK public, for criminals. Up to 20 countries were represented at the first international boiler room conference, organised by the FSA, late last year. The conference aims to encourage a global response to this global problem. Margaret Cole, FSA director of enforcement, in a speech to the conference, said, “The FSA’s investigations into boiler room activity are showing us just how international the crime is. A firm might be operating out of one country, targeting people in another. But when we follow the trail of the victims’ money, we often find a complex web that may take in a further five or six jurisdictions spanning three or four continents.To take effective action we need to get right to the root of the operation. “In order to do this, we want to form a strong alliance with our international counterparts, working towards a common goal, sharing information and ideas and understanding that ultimately, when we’re talking about boiler rooms, we’re talking about serious organised international crime.We ‘Regulation S’ shares which are banned for sale to US investors. ? Recovery room fraud – offering to buy shares, for an upfront commission, back from people who bought their initial shares from a boiler room. ? Threatening unspecified ‘legal action’ and freezing the assets of potential shareholders who decide not to purchase shares, forcing them to go through with the trade. The FSA receives and deals with an average of 5,000 consumer enquiries a year on boiler rooms. Consumers can check whether a firm is authorised by the FSA, or if the firm calling is on the list of 500 known unauthorised firms which illegally target investors, on its website. The FSA works with a range of stakeholders including the City of London Police and international regulators to protect UK investors from boiler room fraud. Millions wrongly relying on EHIC card in Europe Sainsbury’s Travel Insurance issues an important warning to travellers as its research reveals that over the past year, 3.5 million people have travelled to Europe and not taken out travel insurance because they felt it was not necessary as they had a European Health Insurance Card (EHIC). However, the bank warns that the card only provides a holder with access to the same state-provided healthcare as a resident of the country they are visiting, and it will not be of any help if a traveller requires repatriation, private healthcare or encounters any other type of problem or emergency, such as losing money or having belongings stolen. Sainsbury’s Travel Insurance is urging people travelling to European ski destinations to make sure that they have adequate travel insurance and also their EHIC card. Its research reveals one in 10 people who have travelled to Europe during the past 12 months had medical treatment through their EHIC card, 3% for food poisoning, 10% for heat attacks and 12% for flu-type bugs.Winter sports accidents accounted for 8% of cases. Sam Marrs, Sainsbury’s Travel Insurance Manager, says, “Many people wrongly overlook travel insurance because they think their EHIC will cover them when they are abroad, but it will not cover you for private medical care, nor will it pay for you to be airlifted off a ski slope or repatriated to the UK. By not having travel insurance, many people are taking on a great risk when they travel in Europe.” Even with your EHIC card, British people travelling in Europe may still have to pay an initial cost for some treatment, which they may be able to seek reimbursement for when they are back in the UK – this is limited to the equivalent cost on the NHS. Sainsbury’s Travel Insurance research reveals that of those British people interviewed who have had medical treatment in Europe through their EHIC cards, only 49% did not have to pay anything and the others on average paid £386. Of those who did pay, 51% did not claim any of this back when they returned to the UK. Travel insurance would of course cover these costs. “A good-quality travel insurance policy like our own doesn’t just pick up the tab, it provides 24 hour emergency contacts who will help you resolve crisis situations whilst abroad, helping you bridge language barriers and supporting your loved ones should you, perish the thought, become seriously ill,” concludes Mr Marrs. Fast Facts 22145 January/February 2009 ? EXPAT INVESTOR 11
March April 2009