Boiler room fraud is a common scam targeting people through an investment in worthless or nonexistent shares.

It coins its name from a high-pressure sales technique used by brokers. Fraudsters involved in this crime usually operate in places like Spain, Bermuda, Japan and USA so they are outside the barriers of the UK authorities.

According to UK Finance, UK investors lost £61 million to investment scams in the first half of this year.

The fraudsters will directly contact the victim out of the blue offering an attractive investment opportunity that promises high returns. The boiler room operator will collect contacts from UK-listed addresses or publicly available shareholder lists.

The criminals manipulate the victim into thinking they must invest immediately, but once the sale is completed, you’ll never hear from them and likely never see your money again.

Signs of boiler room fraud

• The firm is based overseas
• You receive a cold call (it is illegal in the UK for a firm to cold call and offer to sell shares)
• The caller puts you under extreme pressure
• You’ve been asked to pay money upfront
• You are asked to keep the details of this investment a secret

Steps to increase your financial security

Treat unexpected texts, emails, and calls with caution – If you receive a text, email, or call from an unknown number or sender be careful. Often, victims receive messages where the sender is attempting to cause stress and urgency to make them act quicker. Stay vigilant and do not respond or hang up the phone immediately. For example, if you’re unsure if it’s your bank, find their customer service line and contact them to check.

Check your bank statements – Set aside some time regularly to check your bank statements and ensure there are no surprise payments on them. If you spot an unusual transaction contact your bank.

Never give your details – Fraudsters are increasingly becoming sophisticated in their methods of gaining the exact information they need to follow through on their crimes. Unless you know them or are 100% certain you know you’re talking to the correct person, do not give your details away.

Be wary of the software you download – It’s important to keep your devices updated as most of our day-to-day lives are run via technology. Be vigilant with software downloads and links you click as you could be handing over access on a silver platter to criminals.

Double check URLs and contact details – Often a fraudster will engineer a ‘clone firm’ to impersonate a real bank or investment provider. Check the URL and the contact details are genuine before proceeding any further.

FCA authorised – The Financial Conduct Authority (FCA) has a ‘Financial Services List’ where you can check if the bank or firm you’re dealing with is legitimate. They also have an unauthorised and complaint list, this is another method to check the firm is genuine.

Seek financial advice – If you are interested in investing we suggest you speak to a financial adviser first. It’s best to have all the information and gain an understanding from experts.

If you have fallen victim to a scam or even have suspicions about a website you can report the details to Action Fraud. For advice on fraud, UK Finance has an ongoing national campaign called ‘Take Five’ to raise awareness and educate the public on fraud.

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