Financial Services Authority (FSA) staff examined more than 600 UK websites looking for unauthorised investment deposit taking and market abuse. Of these, 53 were selected for further examination and if found guilty could face injunctive action or winding up.
The move is part of the FSA’s participation in Surf Day – a joint effort between 21 regulatory bodies around the world to hunt down internet scams. The event on 28 March was headed by the International Organisation of Securities Commissions (Iosco).
Most of the sites being investigated further were found to offer unauthorised investment advice, deals or products, in breach of UK law. Customers using services not regulated by the FSA have no ombudsman protection and are not eligible for compensation.
A spokeswoman for the FSA said the body had not been surprised by the number of suspected illegal sites. She added that the internet is making it easier for ‘get rich quick’ schemes to publicise themselves.
‘The internet as a whole offers a great opportunity to investors, but what goes with that it makes it easier for [unauthorised sites] to access large numbers of people quickly,’ she said.
In the US, unauthorised investment opportunities are offered by email as well as websites. The FSA said so far it has not identified the use of email for these schemes as a problem, but wouldn’t know how to control it if it became a problem.
Dan Waters, the FSA’s director of enforcement, said: ‘People must always remember that while the FSA and other agencies will do what we can, we can never guarantee that all websites will be safe. If it looks too good to be true, it probably is.’
The FSA has not named any of the websites under investigation. The body, established by parliament, encourages internet users to refer to its website at www.fsa.gov.uk if they suspect an investment site is unauthorised, or call its customer service line on 0845 606 1234.
Iosco can be found at www.isoco.org
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