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Advice & Resources -

Overview of fraud boiler rooms

Where do these scams come from?
From so-called boiler rooms, an illegal offshore dealing room,
often located in Spain, Switzerland or the US, where highly motivated sales people cold-call UK investors
to try to convince them to buy shares in foreign or UK companies.

The typical victim of an investment scam is a middle-aged professional male with
considerable investment experience

How does the scam usually work?
What other kinds of scam are there?

Who falls for boiler-room cons?

How do I tell if an approach is a scam?
How can I protect myself against scams?

 

Lifting the lid on 'boiler room' scams

A former conman has revealed the tricks of his trade.

FSA acts over 'boiler room' scams by freezing assets

Boiler rooms are offices, often overseas, set up to sell shares to UK investors. They are not authorised by the FSA and act illegally by selling and promoting the sale of shares in the UK. Victims tend to be in their 50s aged and lose on average about £20,000.

Experienced investors are most common boiler room victims

The typical victim of an investment scam is a middle-aged professional male with considerable investment experience, according to an FSA survey

Top tips for avoiding the scam
o Consider the approach - have you been contacted by these people before or had any sort of relationship with them? Does the offer sound too good to be true?

o Check whether the firm is authorised by the FSA. If it is not then it is best avoided.

o Do a bit of background research on the broker. Have they a proven track record that can be verified by an independent party? Are they a member of a trade association? Where are they based? Don't just trust a flashy website as evidence of quality.

o Get independent advice. Call the FSA's consumer hotline on 0845 606 1234 - it has a list of all known current boiler schemes.


o Don't be pressured into buying shares and don't send money unless you are sure of the risks.

o Do as much research into a share that the broker is proposing as possible. Fraudsters have been known to hijack reputable companies' names and sell fake shares in them.


 

Other useful resources

 

Jo's Jottings - Latest features, tips & best articles

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Top tips for the elderly

Quick job search

Money saving/Money making

 

 


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