New share scam warning

Last updated 12:47 15/05/2012

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Fraudsters are cold calling investors pretending to be from a legitimate Japanese company and making lucrative share offers, government officials have warned.

The scammers, who are believed to be operating from overseas, ring and pretend to be from Sumitomo Mitsui Financial Corporation.

The ''boiler room'' scammers persuade their victims to sell underperforming shares and then send legitimate-looking payment instructions and refund documents offering ''protection'' if the sale falls through.

They have also created a clone website of the actual Japanese company.

The warning came from a cross-agency working group, made up of the Consumer Affairs Ministry, Internal Affairs and watchdog Netsafe.

Economic Development Ministry spokesman Alastair Stewart said the scam was relatively new and as far as it was aware no-one had lost money.

However, Consumer Affairs spokesman Jarrod Rendle said the callers were very clever and persuasive.

''They make offers that are very hard to resist. Add to that an impressive website and documentation that appears genuine and even the most seasoned investor is at risk of being taken in.''

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