The Financial Conduct Authority (FCA) has shut down a suspected boiler room that posed a serious risk to consumers.
Boiler room fraud involves bogus stockbroker’s cold calling people to pressure them into buying shares that promise high returns. In reality, the shares are either worthless or non-existent. Over £200m is lost to investment fraud every year in the UK.
The firm called First Capital Wealth Limited (FCW) have had their assets frozen because the FCA believe they were arranging and promoting the sale of investments in Berkeley Brookes LLC without authorisation from them. At least 20 investors together invested more than £650,000 between July and November 2013.
The FCA is contacting customers to keep them informed of developments and are working on retrieving some of the customers money. Often consumers that invest with, or via, unauthorised firms lose much of their money because the scam firms often have few assets and are not covered by the Financial Services Compensation Scheme.
Beware of ‘recovery room’ scams
The FCA also recommends that people who have already invested via FCW be wary for follow up scams. Often people who have been targeted once by a boiler room are targeted again. Sometimes, cold callers will also claim that they can get an investor’s money back if it has been taken by a boiler room – this is a known as a ‘recovery room’ scam.
For further information please visit the FCA website.
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To report a fraud and receive a police crime reference number, call Action Fraud on 0300 123 2040 or use our online fraud reporting tool.