Boiler Rooms (sale of false share certificates)
What is Boiler Room fraud?
A Boiler Room is a bogus stockbroker, usually based overseas, which cold-calls investors and pressures them into buying worthless shares. Historically victims were usually middle-aged men with previous experience of investments / share / stock dealings, who typically lost £20,000 each to the fraudsters.
However, recently there has been a rise in the number of women and younger men being targeted by the Boiler Rooms. In the current economic climate, Boiler Rooms are starting to target victims who have redundancy money or those who are not experienced investors.
The fraudsters are usually well spoken and knowledgeable. They are also persistent. They might call their victim several times with offers of research, discounts on stocks in small overseas companies, or shares in a firm that is about to float. Boiler Rooms make their money in one of two ways. They might simply take your money and walk away. Or they might sell you shares, but at vastly inflated prices and with exorbitant dealing charges.
If you believe you might be being set up as a target for fraud or have been a victim of this type of fraud and need advice, contact your local police.
The financial Services Authority (FSA) is advising people to check its website www.fsa.gov.uk both for a list of Boiler Rooms and to find out if the so-called stockbroker is authorised in the UK. The regulator is unable to take action if the Boiler Room is not based or authorised in Britain, so victims are vulnerable as they will not be able to claim compensation from the FSA or the Financial Ombudsman Service if something goes wrong.