The so-called ‘boiler rooms’ are usually based in overseas locations, although scammers may claim to be located in the UK.
Such scams target experienced and novice investors alike, typically cold-calling the victim claiming to be a salesperson and offering shares in a company. Contact may also be made using email, post, or in person but once established present similar features:
- Aggressive sales tactics are often used
- Very high returns are promised
- Victims are pressured for a quick decision at the risk of “missing out”
- The company the victim is to buy shares in is generally unknown to them (usually because the company does not exist).
- The victim is often asked to transfer money for the shares to an overseas bank account, although UK bank accounts are now used in such scams
The scammers will profit either by taking your money without providing the shares, sometimes issuing you with seemingly valid share certificates, or by selling you genuine shares at highly inflated prices.
Be aware that the people behind the scams will also share or sell on their contact lists to other fraudsters. This can lead to you becoming a target of other related investment scams.