in UK

Sucker lists, recovery room scams, and why victims of scams become more trusting, not less

Tweet about this on TwitterShare on Google+Share on FacebookShare on LinkedInShare on StumbleUpon

If you have been the victim of a scam, your name will be on a list to be cold called – and scammed – again. These “sucker lists” include names, addresses, phone number and background information about the person scammed. They are traded between boiler room operations, because scammers know that people who have been scammed are more than likely to fall for another scam.

This isn’t original research on my part (although there is plenty of evidence to back this statement up in the comments on REDD-Monitor). The statement is paraphrased from a leaflet produced by the US Federal Trade Commission. In 1998.

I know that this is not good news for people who have been scammed. And I know it’s easy for me point out that any phone call out of the blue will be a scam, because I’m not sitting on hundreds (or thousands) of near-worthless carbon credits that I’d really like to sell.

But sucker lists are an important part of the scammers’ operation, and have been around for a long time. In January 1924, the Associated Press reported on the investment schemes of Sir Broderick Cecil Denham Arkwright Hartwell, Baronet, who was otherwise known as the “rum-running baronet”.

In July 1923, Sir Broderick saw a business opportunity: smuggling booze into prohibition era USA. He raised the money for this operation by sending out a circular to 100,000 people, offering shares in his company and guaranteeing them a return of 20% within 60 days.

Sir Broderick received money from 10,000 people. The first four shipments got through and Sir Broderick’s subscribers were paid in full. But when the six and seventh shipments didn’t make it, Sir Broderick went bankrupt. More than US$1 million of investors’ money was lost.

The details of the 10,000 people who bought shares in Sir Broderick’s enterprise were entered into a sucker list, as the Associated Press reported:

“Playing upon the willingness of inexperienced investors to send good money after bad, others anxious to take the money of the trustful have obtained Sir Broderick’s ‘sucker lists’ and many of his creditors have been roped in on new whiskey-selling schemes…”

The following is the introduction to a more recent article about sucker lists. Written by Kate Palmer in the Telegraph, the article is about charity fund-raising, but she starts with a description of the importance of sucker lists to scammers:

If your object is to part people from their money there’s a rule of the trade you will quickly be taught: if you succeed in getting money out of someone once, it’s worth trying again, and again.

It’s the rule that underpins the relentless, pitiless “boiler room” selling of fake investments – often to vulnerable people.

And it’s the rule that gives rise to “suckers lists” – databases of the names and phone numbers of susceptible targets – which are traded for profit among legitimate and unscrupulous businesses alike.

When you’re scammed, the chances of you being scammed again increase, because you become more trusting. This may sound counter-intuitive, but here’s how clinical psychologist Dr Cecilia d’Felice described it to Moneywise:

“Our desire to trust people can be taken advantage of; if we’ve been the target of a scam, we may need to make ourselves feel better by trusting all the more, to reassure ourselves that the world is a good place.

“Sadly, we may then end up being fodder for the scammers once again.

“The very vulnerable may end up serially scammed because their ability to make these judgements, further confused by the desire for material gain, can lead to a gambler’s mentality that surely they’ll win through this time. That is why the scammers have these lists – they understand human nature.”

In the same interview, she adds,

“Remember, we’re being primed with a series of cues, Derren Brown-style, that lull us into trusting the scammers. They often offer a series of steps that appear to give good feedback – until they sting you with the real deal.

“This cognitive loading not only confuses your innate alarm system but also reassures you in the short term to continue, because it looks ‘real’. This is why even experienced people can fall victim to fraud.”

 

Tweet about this on TwitterShare on Google+Share on FacebookShare on LinkedInShare on StumbleUpon

Leave a Reply

28 Comments

  1. Indeed my name, amongst others has royally ‘done the rounds’, to the point where no cold caller has a hope and even when I see what I think is a good potential investment, I’m convinced there’s an unseen/unprinted ‘catch’. Nowadays it’s anything from parking spaces in Glasgow to Alipay shares in China but the profit potential and the pressure tells me something is wrong, even if they are any good, I have no trust in anyone’s ability to make money for me, other than myself…
    If ‘they’ could, the scammers would take your very last penny. They care nothing about your next meal. So happy some people that scammed me are guests at her majesties pleasure, not that it returns the cash and there are still too many of that type at liberty. They should worry as the world is shrinking fast…

  2. I have been Victim three times to so called Boiler Room Companies.I have learnt the hard way and am now sitting on Carbon Credits and a Diamond which are not worth the paper they are printed on.Never do any business with a faceless individual.Always insist on an up front face to face meeting and lastly if in doubt contact the National Fraud Investigation Unit.

  3. Chris, your article says “because I’m not sitting on hundreds (or thousands) of near-worthless carbon credits that I’d really like to sell.”
    Near-worthless implies not 100% worthless. Is it a slip of the pen or are you saying there is some worth in my carbon credits and if so who will buy them?

    Thanks

  4. Sussex Police recently put out a video called “Scam – the secret crime”. It mentions the importance of sucker lists to the scammers near the beginning:

  5. @Michael Fielding – I’m sorry to hear about this. I think it’s worth pointing out again, that no legitimate company would cold call you with investment advice. Never hand over money to a company that cold called you. Just put down the phone. Then report the call to Action Fraud:

  6. @XYZ – Thanks for this. It’s a good question. There’s a long discussion about exit strategies (or lack of them) following a 2013 interview I did with Paul Mark Green, who was running a recovery room.

    What I meant by near-worthless was that at the time the scammer convinced the victim to buy the credits, they were worth about 50p, but they probably changed hand for somewhere between £5 and £15. Projects like HFC-23 destruction, or large-scale dams generate large numbers of low value carbon credits. The value of these credits decreases over time. The value may not have reached zero (hence “near-worthless”) but as there is no secondary market for voluntary carbon credits it is extremely difficult to sell them.

    Nevertheless, I’ve sent your question to some carbon market experts to see whether anything has changed in the last two years (I’m pretty sure it hasn’t). I’ll write up a post when they respond, and post a link in this comment thread.

    In the meantime, these comments from Broken Arrow (following the news last year that Paul Mark Green’s company had disappeared) are relevant:

    “Every industry expert agrees: there is no secondary market for carbon credits of the type that were sold as investments. Companies wishing to offset can buy credits much more cheaply and conveniently than those held by private investors. If you still think a company is going to be able to sell your credits for you (in return for a fee or something else) then you need your head examining.”

    “This includes companies that are apparently engaged in “carbon consultancy”. Genuine companies offering this kind of service would NOT source credits for offsetting purposes from private investors.”

  7. I’ve been approached by a company/outfit called Jacob Grunfield Global Limited offering to purchase my sizeable portfolio of (almost valueless?) Carbon Credits. London phone number, claiming to be registered and regulated within the EEA (whatever that is). They don’t ask for any up front payment but want full details of my CC portfolio. Should I give them these details? Will having my portfolio details enable them to scam me in any way? Very grateful for any advice, Chris – anyone else been approached in this way?

  8. @Jeremy Lane – Thanks for this. No legitimate company would cold call you with investment advice. Jacob Grunfield Global Limited got your contact details from a sucker list.

    The company’s website was registered in April 2015 (by Asim Mirza, who lives in Karachi).

    There’s no record on OpenCorporates of any company registered under the name Jacob Grunfield Global Limited.

    I think it’s safe to say that a company that steals its logo from a company as big as Chevron isn’t planning on staying around too long:

    Please report Jacob Grunfield Global Limited to Action Fraud:

    EEA is the European Economic Area, but it’s completely irrelevant to whether Jacob Grunfield Global Limited is a scam or not. It is a scam. Don’t give them any information. Don’t talk to them. Put the phone down if they ring again.

  9. Thanks Chris for the information. I will be reporting Jacob Grunfield Global Ltd to Action Fraud

  10. Dear Chris,

    I was approached recently by a company named Alpha Capital, offering to sell my Carbon Credits to a Swedish company who, in some way or another had an obligation to buy up so many Carbon Credits at a predetermined price of £12.44 per unit. Since I paid £4 and £6 per unit this would represent a fairly healthy profit.

    In return for this service I would be required to make a payment of 1% of the sale proceeds,up front, to be held in an ESCROW account, but repaid back to me within five working days of the completed sale.

    I obviously consider this to be a Recovery Scam, but pass the information on to see if anyone else has been contacted by this company.

    The Director of the company, Alpha Capital Ltd.is a Mr. Jonathan Colin Currie, and he has allegedly signed the Acquisition and Sales Reservation document.

    I was told that all their representatives/advisers are FCA registered, and I spoke with a Mr. Thomas initially.

    Please pass this on to all your readers, and I would be interested to know if you, or any one else has had dealings with this company.

    Their address, by the way, is 68, Lombard Street, London EC3V 9LJ

  11. I too have been approached by Jacob Grunfield over a period of several days with a fairly persuasive approach until right at the end they needed a surety bond of 15% of the suposed price they were going to pay me for the credits. I waited until I had their NDA, Surety Bond and Bank details. I have now advised Action Fraud. Needless to say I shall not be taking advantage of Jacob Grunfield’s generous offer.

  12. I’ve been approached several times in the last week with a offer to sell my credits. Just got their NDA and as yet no up front costs have been raised. No Surety Bond. After reading other comments I shall be notifying Action Fraud and not taking up there offer. Sorry the company in question is Jacob Grundfield

  13. Hey I have been approached by merlin woods to invest in their project in Pakistan. They are offering £1500 every month on the investment of £30000 and you will get your capital back any time you want, please advise me if they are scam or real?

  14. C’mon Sam, use some common sense. You’re cold called basically by a stranger offering you a 5% monthly return (60% annually) plus your capital back any time you want. Yet you ask if they’re real or a scam.

    Interest rates in the UK are presently 0.5% a year. Sorry but you’re a mug having to ask your question. Yes, that might hurt but if you realise it you’ll keep hold of your money. It’s good to be called a mug in my book if you then don’t lose money. Chances are Merlin Woods would call you ‘smart’ and ‘switched on’ for investing with them, but what would the result be?

  15. @sam – Thanks for this comment. It does sound too good to be true as Alex points out. There are three posts about Merlins Wood on REDD-Monitor:

    16 February 2012: Merlins Wood’s mysterious REDD projects in Pakistan

    21 February 2012: A response from Surriekha Khan about Merlins Wood’s REDD projects in Pakistan

    23 March 2012: SAFI: Forest Department and Merlins Wood process in Pakistan neither consultative nor transparent

    I’d love to hear more details about what Merlins Wood told you. Did you get anything in writing from them?

  16. Chris

    1) LOVE the work and help you give on your blog warning everyone about all the scams. Education is always the key. Keep up the great work.

    2) I’m sure you’ve seen many of the sites/comments around the net attacking you, calling you a lowlife and a scammer whose ‘con’ is to disrespect ‘genuine’ companies so you yourself can sell investors scam products! All total nonsense of course but it proves one thing – your posts are hurting the real scammers. Great job, the scamming scum really don’t like it when they’re called out and people like you disrupt their stealing of innocents money.

  17. I have received an offer to purchase my investments in African Land (made via Capital Alternatives) at a generous rate, from a Mr John White, representing a company called First Capital Securities, a member of First Capital Group, which is stated to have offices in London (Suite 10-14, 51 Threadneedle Sttreet, EC2R 8AY, and in China (Zhongmin Time Plaza, 25-26 Floors, Block B, No. 12 Sun Gang Road, Shenzhen, 518028,

    I’d be very grateful for any information or advice about how secure this offer might be. I have said that I would not pay anything up front. I’m being asked however to take out an insurance policy (no details supplied so far) in order to secure First Capital against any reneging on my part. It seems fishy to me, but I’d be glad to have any advice before deciding.

  18. @Jeremy Lanr – Thanks for this. No legitimate company would cold call you with investment advice. First Capital Securities got your contact details from a sucker list. (See also this comment, above.)

    First Capital Securities is a scam. Please report the company to Action Fraud.

    Here’s a warning from the FCA about Capital Securities / First Capital Securities Company Ltd.

    The company’s website was registered in October 2014 (anonymously, of course).

    The website says nothing much about the company (apart from it was founded in 1993 in China – odd that it took 11 years to register a website, isn’t it?). The testimonials are made up – the photographs are taken from Stone Street Capital LLC’s website.

    Here’s what Joshua (a practising lawyer) has to say about them on justanswer.co.uk (there’s more here):

    I have come across that organisation a week or two ago by way of someone else that has been contacted by them. There is no such registed limited company as the one they claim registered at COmpanies House. Also the phone number does not connect. They also claim to offer financial advice which is a reserved activity but they are not registered with the Financial Conduct Authority. Accordingly the outfit does not have the credientials they claim which may amount to fraud by deception. Further the proposal they have made to you is typical of an advance fee fraud – whereby a payment is requested on some pretext or another which can vary widely in return for the promise of reward. Advance fee frauds are designed to extract payment and that alone. You would not be asked for a security bond to sell land. Quite the reverse if they wish to buy it they would pay you a deposit prior to completing the sale. I would recommend not entering into any further discussions with the other party and reporting the matter to the police using their action fraud service. http://www.actionfraud.police.uk/. If you have already paid any money to them you should contact your bank as soon as possible to attempt to claim back funds transferred. This can often be difficult but may be possible if the funds have not yet cleared or if the funds have not been removed from the other party’s account.

  19. Jeremy

    EVERY call/email/letter you receive about a) your African Land, and b) any other investment will be from a scammer, EVERY ONE OF THEM, NO EXPECTIONS.

    Like Chris said you are on a suckers list so the scammers will be contacting you time and time again trying to get you to take their bait.

    The clue the African land deal is a scam is the ‘insurance’ payment, basically an advance fee fraud – pay me £1,000 and I’ll send you £10,000. But you can only get the £10,000 if you first pay the £1,000.

    Pay the £1,000 and 2 things will guaranteed happen –

    1) You won’t get the £10,000, and

    2) You will be told there’s another ‘problem’ and you need to pay another £1,000 to get the £10,000

    Pay the next £1,000 and 2 things will happen –

    1) You won’t get the £10,000, and

    2) You’ll be told there’s another problem, perhaps pertaining to UN Resolution 312a (which states blablabla etc, of course it’s made up). In order to sort that problem out, you’ll need to pay another £1,000 then the £10,000 will be yours!

    And on and on it will go until either you realise what’s going on, or you have no money left.

    Please don’t disregard this advice or you will only have yourself to blame for losing yet more money.

  20. Many thanks Alex for your comments. I suspected that what you say would prove to be the case and have not taken up the offer from so-called Capital Securities. I have also rwported the scam to action Fraud.

    Cheers, Jeremy

  21. Thank you Chris for the sound advice you and the other contributors here are providing. I too have been the victim of scammers. I bought rare earth metals and have been approached by a number of cold callers over the years offering to sell them. I have refused but they keep coming. The latest is a firm called Jacob Grunfield Global. Initially they asked for a 2% commission on completion. Now they want £1640 for a Surety Bond. Of course I will send nothing. Still it is reassuring to read here that it is definitely a scam. Keep up the good work.

  22. Jacob grunfield wanted to sell my carbons at no cost then last minute. Com wanted a bond so I told them James and left it at that
    Gary

  23. I’m also a victim of carbon credits. I have spent £200000 with different companies – diffraction in old street and wellzable in Mayfair. Both went into liquidation. Now both Jacob Grunfield and Alpha Capitol have rung me and offering to sell my carbon credits. One asked for 10% deposite and the other accepted 2100 £ deposit. This time the person from alpha capitol is called Johnathan Jennings. I will report to action fraud and FCA. They have sent me their account details. Not pay anything. Do I have to report their bank details to action fraud and FCA?

  24. @Christina – I’m sorry to hear about this, but thanks for your comment. Jacob Grunfield and Alpha Capital are running recovery room scams. Please give Action Fraud and FCA all the information you have about these scam companies – including their bank details.

    For what it’s worth, I wrote about Wellz Zable in September 2013:

    Is there a link between Wellz Zable and Carbon Neutral Investments?

    Predictably enough, the director of Wellz Zable, Christopher Newell, wrote to me, asking me to remove the post:

    Response from Christopher Newell, Wellz Zable: “Please kindly have this removed from your website within the next 48 hours”

  25. If only my father had used the laptop I bought him last Christmas, he might have found Blackrock Commodities and several other scam companies mentioned on the web, before losing £195k.

    I cannot believe how easy it is for fraudsters to get away with a serious crime that can ruin lives. Action Fraud are absolutely useless and the Police just don’t want to know.

    I would like to get in contact with people in the UK have have been the victim of fraud, carbon offset, wine, diamonds & art. I’m sure if enough details could be brought together a file could be created and handed over directly to the Police. I’m so angry about what’s happened to my parents, I would rule nothing out as far as “justice” is concerned.

    If anyone has had dealings with; Imperial Escrow Solutions, Earth Green Capital,Black Rock Commodities, Green Rock or a scammer going by the name of Barry Shawcross (allegedly working for London Commodity Arbitration Service), please contact me.