Understanding Boiler Room Scams
You may have heard of the term boiler room scam but not bene too sure of what it mean. You shouldn’t be worried or concerned about this because even though boiler room scams are well known, they are still a type of fraud or scam that not everyone is aware of. However, given that falling for this style of scam can cause considerable problems for people, it makes sense to familiarise yourself with the term and what impact it can have on your life.
The fact that there was a Hollywood film released back in 200 entitled Boiler Room, which focused on this style of scam, means that there will be awareness of what it entails but if you need to learn more about this style of scam, this guide has everything you could want or need.
The basic set-up of a boiler room scam comes with people working in an office making phonecalls to people and trying to persuade them to engage in a financial transaction, normally the buying of shares.
This is a serious crime because none of the people engaged in this sort of activity are authorised by any national regulators to sell shares or provide advice with respect to shares. In the United Kingdom, these operators are not covered by the Financial Services Authority which means that you should look to give them a wide berth.
These Shares have No Value
The usual twist of the fraud comes with the fact that the shares people are being encouraged to buy do not exist or they have no value at all. The fact that these people will often engage in in high pressure sales techniques or strategies to make a sale is another fact that makes them worth looking out for. While there will be people who are able to withstand high pressure sales strategies, it is easy to see that the more vulnerable people in society may find themselves at risk when dealing with these people. It is important to be aware that this is a fraud and that there is no value to be gained from buying shares in this manner.
One of the worrying things about boiler room frauds is that they are operated from all around the world. Notable boiler room set-ups have been found in countries as varied as Spain, the United States of America, Japan, Switzerland and Eastern Europe.
However, while awareness of boiler room fraud is growing all the time, so too is awareness of the opportunity to make money when acting in this manner, and this can see new boiler room operators popping up all the time. After all, fraudsters and con-artists are all looking for ways to make money and given that boiler rooms work, it is easy to see why people will be interested in getting involved with this sort of action.
There is a Commonality in the Targets for this Style of Fraud
Studies undertaken in the mid 2000s indicated that the common victim for this style of fraud were males in their 50s living in London and the South East of England. Given that the average loss for this style of fraud was £20,000 it is clear that people with money are being targeted. People who have disposable income clearly know the benefits of a wise investment and looking after the money.
The fact that these people have money but would clearly be interested in increasing the level of savings or money they have means that they are the ideal targets for this sort of crime which is based around investment. Boiler room frauds are not likely to be as effective in poor parts of the country because share investments will not be as common in these areas.
One of the worrying aspects of people who were victims of this style of crime is that they said that they received numerous calls and over time, eventually gave in and bought shares. This is definitely a worrying trend if a person believes that it is easier to just buy shares to stop someone from hassling them.
There is no doubt that boiler room trends and scams represent a major risk and given the sums of money potentially involved, there could be serious repercussions for people involved with this style of crime. This means that there is a need for defence solicitors who are highly experienced in the way that these scams operate.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.