Avoiding Scams and Unauthorised Activity

Before you avail of financial services, take a few simple steps to protect yourself

What can I do to protect myself from potential scammers?

• Make necessary enquiries, obtain independent advice
• Do not provide personal information about yourself or agree to send money until you are satisfied that the firm you are dealing with is authorised
• Check the Central Bank Registers to verify the firm is authorised

Make yourself aware of the scams that are out there, and learn about spotting scams further down this page.

What do I do if I have engaged with an Unauthorised Firm?

If you deal with any unauthorised financial services firm or person you risk losing your money. Before dealing with any firm or person offering financial services, check if that firm or person is authorised to provide the financial services they are offering.

What more can I do if I find myself the victim of a scam or fraud?

• Stop sending money

  If you believe you have been a victim of a scam or fraud, firstly do not send any more money to the firm/person in question.

• Report what happened

  Immediately report the matter to your bank, the Central Bank and the Gardaí and discuss your options. Obtain independent advice.

• Avoid being targeted a second time

  If you have been a victim of a scam or fraud, you are likely to be targeted again. This could be weeks or years after the original scam or fraud took place.

  Often you may be offered what seems like a chance of recovering the money you lost on the original scam or fraud. This could take many forms but will usually involve sending some sort of fee in order to recover your money.

  Some examples include, a supposed tax, government administration fee, re-bonding fee etc. The scam or fraud operators will often pose as fictitious government agencies, issuing you with fraudulent papers regarding legal action, non-disclosure agreements, copies of share certificates etc. Be advised these documents can look official and genuine.

  It is highly unlikely you will ever recover your money from the original scam or fraud and this will usually be an attempt by the initial fraudsters to extract even more money from their original victims. Do not send them any more of your money. Report the matter to the Central Bank and the Gardaí.

• Beware of new scams

  The perpetrators of the original scam or fraud may contact you again or share your details with other fraudsters. It may seem like a completely new investment opportunity with a new firm, website, contact details and personnel. Beware as fraudsters trade contact details with each other, known as 'sucker lists' and take the view that as you have been a victim of a previous scam or fraud that they will be able to persuade you to part with your money again for a new scam or fraud.

• Take steps to protect and inform yourself

  Make sure you only deal with authorised firms, Check our Registers to ensure firms are authorised or contact the Central Bank directly on 0818 681 681 or +353 (0)1 224 5800. Authorised firms are not normally in the habit of cold calling people with offers to buy or sell shares. If you are cold called you should be very cautious in your approach and take the necessary steps to verify the firm is genuine.

What if somebody contacts me offering a good price for shares I already own?

Always be careful before buying or selling shares, especially if you are contacted unsolicited by cold-calling or email/letter. Before dealing with any investment firm, check our latest warnings and find out how to check if the investment firm is authorised to provide the services which they are offering to you further down this page. Ask them for proof of who they are and verify it with us.

What if I have already dealt with an unauthorised investment firm?

If you invest with an unauthorised investment firm, your funds may be at risk, and you will not have access to compensation under the Investor Compensation Scheme  or the services of the Financial Services and Pensions Ombudsman. You should immediately contact the Central Bank and the Gardaí.

Spotting Scams

Common scams and swindles like the ones described below may be a matter for the Gardaí rather than the Central Bank. The information below is meant as general information. The Central Bank only has the power to investigate a firm/individual where there is unauthorised offering of regulated financial services, the most common of which is a Boiler Room type fraud.

Scams take many forms, but the most important things to remember are:

• If somebody contacts you out of the blue offering you money or an easy way to make money, it is probably too good to be true. This could be someone who says they have access to a large amount of money but needs your help to get to it, or notification you may receive that you have won a lottery you never entered.
• Be careful of contact that appears to be from your bank requesting verification account numbers and passwords. Banks will NEVER request your full personal access code or password. Fraudsters are very good at making e-mails look genuine, and have been known to set up elaborate and convincing dummy websites. If your credit or financial institution contacts you seeking copies of your photo identification and proof of address documents, you should contact your firm to verify the request is legitimate before providing any information.
• Unauthorised investment firms frequently 'cold-call' offering to buy or sell shares. This is known as a boiler room fraud.
• If you have previously been a victim of a scam then fraudsters are likely to target you again.

Boiler Room Fraud

The Central Bank receives a large number of queries and complaints from members of the public regarding 'boiler rooms'. These frauds take place when a person is contacted by an unauthorised investment firm and offered the opportunity to purchase shares in a company or to sell shares they already hold. These firms are usually based overseas and commonly charge an upfront fee. Shareholder registers are publicly accessible which allows fraudsters to find out what shares you own.

The rate of return offered is usually very high and often advertised as guaranteed or risk-free. High-pressure sales tactics are generally used. The fraudster will often tell you there is only a short window of time for you to agree to purchase/sell and if you don't say yes straight away you will miss the opportunity. Sometimes information that is in the news will be employed as a hook; for instance, a scam of this kind, reported to the Central Bank, involved a company claiming to be pre-selling stock in a well-known company prior to it floating on the stock exchange.

If you have been approached by a 'boiler room' firm or believe you have been a victim of a 'boiler room' fraud, you should report it to the Central Bank. If you believe you are the victim of a scam or fraud of any nature, you should also report the matter to the Gardaí.

Other Common Scams

Advance Fee Fraud

The classic advance fee fraud involves a foreign prince claiming to be in possession of a vast fortune, who needs you to forward him a small sum in order to get it released, and will share it with you in return. There are innumerable variations, including 'Spanish Lottery' fraud (you are told you have won a lottery you never entered, and must pay a fee or some tax to claim the winnings). You should never send money to an unknown person or company in return for a promise of a much larger sum.

Phishing

The idea behind 'phishing' is to defraud bank customers by tricking them into giving away confidential details such as online passwords, PINs and the answers to security questions. While it most commonly takes the form of an email purporting to be from your bank asking you to 'confirm' these details, phishing scams can be elaborate and even include sending links to mock websites made to look like your bank's real website.

Your bank will often have useful information on their website warning of activity of this kind. No matter how reasonable the e-mail sounds, you should be aware that banks will never ask for your personal details via e-mail. You should not respond to, or click any links in, e-mails of this kind.

Money Transfer Scam

You are contacted via e-mail or see an ad online or in the newspaper offering commission in exchange for receiving money into your account and then sending it somewhere else, often via a money transfer service. On the face of it, there seems to be no risk involved and your own money is never at risk. This is a technique used by criminals to dupe ordinary people into laundering their 'dirty' money for them, and if you get involved you potentially expose yourself to criminal liability.

Cloned Firms and Individuals

Fraudsters are increasingly using legitimate firms details to add an air of legitimacy to their fraud. This type of fraud typically involves the firm cold-calling members of the public. The fraudsters will 'borrow' all of the legitimate information of an authorised firm for the purpose of this fraud. They may quote authorisation numbers and links to seemingly legitimate websites and even provide the real address of an authorised firm. Consumers are advised to check our register to verify a firms details and to call the firm back directly using its advertised phone number. If you have reason to be suspicious, please remember that if a deal sounds too good to be true, it probably is.

Useful Links for Further Information on Common Scams

Competition & Consumer Protection Commission.

Garda National Economic Crime Bureau

European Consumer Centre Ireland

Financial Services Authority (UK): Little Book of Big Scams

FINRA Investor Education Foundation (US): The Psychology of a Scam

FINRA Investor Education Foundation (US): Scam Meter