What is a boiler room scam?
Boiler room operations are share scams and the curse of investors. The operator of a boiler room scam will con an investor into buying worthless shares at inflated prices that are impossible to sell. Boiler scams can be very convincing, which is why they’re on the rise in the UK. Here are the top signs that suggest you are being targeted in a boiler room scam:
1. You receive a call or email from an unfamiliar source
Boiler room scammers will target you via cold calls or cold emails, so it’s important to stay vigilant online. Before speaking to a cold caller or responding to a cold email, consider the following:
How did this person get your number?
Why are they calling you?
2. You are asked to keep your communications confidential
Being asked to keep the contents of the call confidential should be an immediate red flag and is a strong indication that you are being targeted in a boiler scam.
3. You are pressured into an instant decision
In a similar vein, boiler room scams will involve the scammer using scare tactics to strong-arm you into making a purchase decision on the phone. A legitimate company will understand if you need time to consider.
4. You are promised a guaranteed win
A guaranteed win is a promise even the most experienced companies wouldn’t make. All investment comes with risk, and legitimate companies will outline the risks to you before you invest. When it comes to boiler scams, scammers will act as though you’ll win in every outcome, which simply isn’t possible with investment.
5. You are promised huge returns
If the caller can’t clearly explain how this return will be generated, chances are it’s a boiler room scam. Promises of discounts or gifts are also a big tip-off that something isn’t right!
6. The caller has a prestigious job title at a fancy-sounding company
Scammers will overcompensate to try and reassure you by claiming to have a professional sounding name, title, or company. Some even go as far as to pretend they’re calling from a legitimate company and try to confuse you by using technical jargon without stopping to explain.
7. The caller is based abroad
As it’s illegal to sell shares via cold calling in the UK, boiler room scammers will try calling from a UK-listed phone number even though they may be based overseas. This can, of course, be difficult to detect but is important to be aware of.
8. You are asked to pay upfront
Callers who ask for upfront payment may use the term ‘advanced fee’ or ‘deposit’ and claim the sale can’t go through without this money. A legitimate company will let you go away and do some research before investing any form of payment to secure shares. If they press the matter, it’s usually a sign they are attempting a boiler room scam.
9. You are asked for your bank details
A legitimate company will never ask for bank details over the phone and would always offer a secure method of payment. Scammers tend to ask directly for bank details on the phone – a huge warning sign of a boiler scam!
10. You are given ‘secret, insider knowledge’
If the caller really did have industry secrets, they wouldn’t be sharing them with a stranger on the phone. Look out for callers who tell you they have insider knowledge but can’t tell you how they are privy to it.
We hope you will never have to deal with a boiler room scam. However, they can be incredibly convincingly and meticulously pulled off. There are reports of incidents where people have lost their life-savings to a boiler room scam and were unable to recover these funds. You can never be too careful, so if you think you’ve been scammed by a fraudulent shares company, get in touch with our team of experienced fraud barristers.