Phone Callers / Boiler Room Fraud
Please be alert to unsolicited telephone callers requesting appointments.

A telephone call has been made requesting an appointment to discuss crime prevention and offering a free shredder.

The safest course is to refuse to talk (either at the door or over the telephone) to anyone who is not known to you.

If you have not asked them to call and have not made an appointment then hang up.

Boiller Room Fraud

A boiler room fraud is where a bogus stockbroker, usually based overseas, cold-calls investors and coerces them into buying worthless shares. Their favourite targets are middle-aged persons with previous experience of buying shares, whose names can be found on share registers.

The fraudsters are usually well spoken and knowledgeable. They often have experience of working in the stocks and shares market.  They are persistent and have been known to call their victim several times. Among the tactics employed by such fraudsters are assurances that a company is about to announce a major discovery in technology or mining, for instance, and that this will send the price of its shares soaring.

Your alarm bells should start ringing if you are called out of the blue. Why would somebody you do not know or have a working relationship with call you to offer you a fantastic deal?
The Financial Services Authority (FSA) recommends that potential investors check its website both for a list of boiler rooms (www.fsa.gov.uk) and to find out if the so-called stockbroker is authorised in the UK. The regulator is unable to take action if the boiler room is not based or authorised in Britain, so victims are vulnerable as they will not be able to claim compensation from the FSA or the Financial Ombudsman Service if something goes wrong.

A check can also be made with the US Securities and Exchange Commission (www.sec.gov) to ascertain if the company is regulated within the United States.

Warning signs
Scams often contain similar features that may alert you to the fact that they are not genuine:

if it sounds too good to be true it probably is
you are asked for money up front to pay unexpected fees (such as customs) before your shares can be released
you are put under pressure to reply immediately or the offer will be given to someone else
you are asked to keep the details secret.

The company will usually be based overseas, as it is illegal for UK based firms to cold-call an investor to attempt to sell shares. The boiler room may have a UK listed phone number to give the impression that they're based in the UK, but a check with the FSA will confirm if they are legitimate or not.