A boiler room involves bogus stockbrokers, usually based overseas, cold calling people to pressure them into buying shares that promise high returns. In reality, the shares are either worthless or non-existent.
Fraudsters are headhunting newly qualified traders and luring them in with potentially high salaries, massive incentives and no need for previous experience in sales.
If you take a job in a boiler room you could face prison or a fine under the Fraud Act 2006. All a court has to do is prove that you were was dishonest in behaviour and intended to make a personal gain or cause loss to another.
One victim and now convicted fraudster told the NFIB “I was enrolled in a Foreign Exchange training academy to learn how to trade and improve my skills. When I successfully completed the course I got called by different people that said to me I could make big money on the investment market and within alternative investments”.
“I was young, impressionable and like everyone in this business wanting to make money and didn’t realise that these people were fraudsters. It must be happening all the time”.
Commodities usually associated with boiler rooms are, wine investments, carbon credits, land banking, rare earth metals and diamonds. Recently the NFIB’s proactive intelligence team have warned about new methods being used by fraudsters to dupe investors using including crowdfunding, diamond buyback courier scams and computer server leasing.
How to protect yourself
- Always check a company’s contact details (such as a website, address and phone number) are correct and that they are registered in the UK. Don’t be fooled by a professional looking website, these can easily be run by fraudsters who are proficient in web-design.
- Be particularly wary of job offers from companies who are based overseas as it extremely difficult for you to verify who they are.
- Discuss the job offer with a trusted friend or relative, if in doubt – get in contact with us for some advice.
- Check the credentials of the company you’re dealing with. Check for known fraudulent organisations at the Financial Conduct Authority.
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.
You can now also sign up for free to Action Fraud Alert to receive direct, verified, accurate information about scams and fraud in your area by email, recorded voice and text message.