hit the United Kingdom and which it is feared could spread to the Island.

The fraud involves high pressure salesmen trying to pass off collections of stones for much more than they are worth.

Advertisements are placed in newspapers and mail is posted through doors offering gem collections for sale at reasonable prices on the basis they are a sound investment. Potential customers are told the gems could be sold at a forthcoming auction in New York for a profit of between 30 and 40 percent.

After agreeing a price, the client is persuaded to pay up first, after which a bag of gems in sealed bags is posted to them.

The bags arrive with strict instructions that they are not to be unsealed as this will affect their valuation and guarantee.

But many British clients have become suspicious and, after breaking the seal, have been told by an independent gem authority that their collection is not worth as much as they thought.

One Englishman who bought several gems for 48,784 found that his collection was really worth just 3,150.

There are several hundred similar victims throughout the UK, according to Police.

Bermuda Police have been alerted about the scam by Interpol, the international Police network.

Two companies, which are known to have perpetrated similar frauds -- one in the Netherlands, the other in Belgium -- have been closed down by Police. They were both run by Canadians.

But there are believed to be many other similar operations, particularly in Canada.

Canadian authorities have told Interpol that, in Toronto alone, there are about 160 individual companies which engage in telemarketing frauds.