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Boiler Room Fraud
What is boiler room fraud?A boiler room is a bogus stockbroker, usually based overseas, which cold-calls investors and pressures them into buying worthless shares. Their favourite targets are middle-aged men with previous experience of buying shares, whose names they find on share registers. The most common victims of so-called boiler-room scams are experienced investors, who typically lose £20,000 each to the fraudsters.
The fraudsters are usually well spoken and knowledgeable. They are also persistent. They might call their victim several times with offers of research, discounts on stocks in small overseas companies, or shares in a firm that is about to float. Boiler rooms make their money in one of two ways. They might simply take your money and walk away. Or they might sell you shares, but at vastly inflated prices and with exorbitant dealing charges.
Scams often have 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 'prize' can be released.
- You are asked to provide your bank account, credit card details or other sensitive personal information.
- You are put under pressure to reply immediately or the money will be given to someone else.
- You are asked to keep the details secret
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