Beware the legal bandits !

Identity theft seems to be the latest crime wave separating victims from their hard earned money, but there are also clever people operating entirely within the law who are achieving the same result.

Vast numbers of people found themselves owning shares when the N.R.M.A. demutualized some years ago. For some this was their first experience at owning shares and as a result entrepeneurs started to exploit their vulnerability.

All holders of I.A.G shares - this being the insurance arm of N.R.M.A. - received letters offering to buy their shares. The inducement was that there would be no broker's fees - and all the holder needed to do was to sign on the dotted line of the attached legal transfer document.

The only problem was the price. The sum offered for the shares was usually at least half of what those shares were currently worth on the stock exchange.

It is amazing just how many people happily signed away their free shares. In some cases they were hit at a vulnerable time when money was urgently needed and many had no idea what the actual worth of their shares would be - and had no idea that it could be determined by checking the share prices in their local newspaper.

This purchase scheme runs on a well oiled strategy - and once again letters of offer are in the mail to all I.A.G. shareholders. Circumstances may have changed since the previous offer. The owners of the shares may be deceased and the shares passed on to a spouse or other family member.

Perhaps the present economic downturn may be more conducive to triggering a selling decision.

This has been a most successful operation and it has netted the organizers millions of dollars. What can be more simple than buying something at half it's worth and promptly reselling in through the legitimate stock exchange ?

The scheme is also perfectly legal. No law is broken if a buyer offers to purchase something at a price lower than it's worth. That is the first law of commerce and is exploited daily when merchants advertise in newspapers and on TV offering goods way below their supposedly real value - thus reversing the deal.

Buying or selling - both sides need to do their homework - and for those with shares the best protection is to learn to keep abreast of values by checking the share price in daily newspapers on a regular basis.

And check with a financial adviser before signing on that dotted line !