Boiler Room Scams
Boiler Rooms are businesses that use
high-pressure sales techniques to sell investments with the promise
of almost guaranteed massive returns. What is actually being sold
is worthless stock in companies that are either overvalued or don’t
exist. According to the Financial Services Authority investors lose
on average £20,000.
Targets for this type of scam are usually
cold-called using phone numbers obtained from public shareholder
lists. These callers are often based overseas as it is against the
law for investors to cold-call in the UK and they are then beyond
the jurisdiction of the FSA.
A Boiler Room may look and sound legitimate
and have a UK address, phone number or a slick website. They may
call potential investors for many months hoping for a sale and are
very persistent even catching out experienced investors.