‘Boiler room’ fraud gets it’s distinctive name because it refers to the high pressure tactics used by phone sellers of fake or virtually worthless shares.
It is a type of fraud that is very much on the increase here in the UK as well as in many other countries of the world.
Those most likely to be targeted by boiler room fraud are people who are thought to be fairly affluent and around middle to old age.
The fraudsters are not picking a group they believe to be overly gullible though, they are looking for those who have a disposable income and who may be looking to make a quick profit.
In fact, experienced investors have been known to have become victims of boiler room fraud too.
Typically, those behind boiler room fraud have chosen to use names, addresses and agents which appear to originate from the US, UK or other European countries.
Boiler room fraud begins with an unsolicited telephone call to an investor, offering to sell them shares which are either very high risk, totally fake or just worth considerably less than the amount being asked for them.
The callers tend to be aggressive and extremely persistent and also very persuasive, never taking ‘no’ as an answer.
There are many cases of such fraudsters calling their intended victims at all times of the day and night, every day, until they have secured a sale from them.
In nearly every case, after paying for these shares, the victim will receive share certificates that are are useless, worth a fraction of what they paid, or they receive nothing at all.
In most Western countries it is illegal for shares to be offered for sale in this manner but that doesn’t mean to say it doesn’t happen.
If you receive such a telephone call then be on your guard.