Nationwide Investigations Group has had a recent increase in the demand for Private Investigators in London being instructed by Clients who have been “scammed” out of large sums of money on fraudulent Shares/Stocks Deals!

A few of our members have asked for an explanation regarding what a boiler room scam actually means, so we thought we would draft this article for all interested in this type of scam.

The following explanation provides a simple insight

Boiler Room Scams – what they are and what to look out for

What is a Boiler Room?

Boiler Rooms are businesses that use high-pressure sales techniques to sell ‘sure thing’ investments with the promise of massive returns. In fact, what they’re selling is worthless stock in often unquoted companies that are either overvalued, or simply don’t exist at all.

How they work

Boiler Room operatives generally cold-call their targets, using phone numbers from publicly available shareholder lists.

Because it’s against the law for investors to cold-call in the UK, they tend to be based abroad (often Spain, Switzerland, or the US) where they’re beyond the jurisdiction of the Financial Services Authority (FSA). They can approach anyone, anywhere.

Boiler Room techniques

A Boiler Room can look and sound legitimate. They may mention companies you’ve heard of, give themselves a UK address or phone number, and have a professional looking website.

They’re notoriously persistent, and can hound a victim for months in the hope of a sale, catching out even seasoned investors. According to the FSA, Boiler Room Scam victims lose on average £20,000.

Remember, as a general rule, if an investment sounds too good to be true, then it almost probably is.

Anyone interested in a pretty accurate understanding of what a boiler room scam looks like should take it upon themselves to watch the movie released in 2000 about a bunch of scam artists selling all sorts of stocks and sinking peoples lives based on hard selling techniques into products and stocks that don’t exist.

What to do if you’re called

If you think you’re being targeted by a Boiler Room, the FSA’s advice is not to worry about being polite, just hang up. You should then dial the FSA contact centre on 0845 606 1234 with as much detail as you can remember. You’ll find more information about Boiler Rooms on the FSA website www.fsa.gov.uk