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Fewer investors fall for boiler room scams

The success of boiler room frauds fell away last year, despite more attempts being made to con people into buying worthless or non-existent shares.


Boiler room frauds involve dishonest salesmen, usually based abroad, cold-calling people in the UK and pressurising them into buying shares which turn out to be worthless because they are non-tradable, overpriced or non-existent.

The Financial Services Authority (FSA) says it received 5,401 reports about such scams, a 19% rise from 2010.

However, the number of victims it was aware of fell by 7% to 770.

The FSA said that victims who then went on to invest lost an average of £20,000.

A new trend has emerged over the last couple of years where fraudsters have starting pretending to be from legitimate firms rather than using a fake company name.

Fewer victims

Jonathan Phelan, the FSA’s head of unauthorised business, said: “It is encouraging that the number of people who actually parted with their money has dropped. This suggests that our warnings about unauthorised firms are getting through and people are better prepared when they are called out of the blue.

“So far, the figures for the early part of 2012 show this trend continuing – but it is too early to draw any firm conclusions just yet.”

For further information visit the Financial Services Authority website.

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See also:
Boiler room fraud
Call centre fraud

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