What is a 'Boiler room'?
A boiler room is an operation selling shares to investors in companies which are usually a fake or are not successfully trading.
- Scammers typically cold-call people and use hard-sell tactics to sell shares in UK or overseas based companies that prove to be worthless.
- Boiler rooms are usually operated from overseas locations.
- The scammers profit by either just taking investors' money without providing shares or selling the shares to them at highly inflated prices.
'Recovery Room Fraud'
Often those that run boiler rooms will share their contact lists with others. Therefore if you have given your information to one company you may well receive calls from other companies suggesting they can assist to sell your shares or offering further purchases.
What are the warning signs?
- Have you been contacted about investing in shares?
- Have you never heard of the company before?
- Were you promised high rates of return?
What you can do:
- Have you researched the people selling the shares? Did you find any solid information?
- Have you checked the FSA Register for the company you are investing in, or that the people selling to you are authorised?
- Have you checked the current trading price?
- Does it sound too good to be true?
Where can I get more information?
Other UK agencies interested in boiler rooms are:
- Financial Services Authority and
- City of London Police (Operation Archway) which maintains a national boiler room intelligence database.
- FSA Moneymadeclear
- Operation Archway.
If you are suspicious of an offer you have received and are not sure whether to buy the shares, refer to our tips on how to protect yourself.
Should I report to the SFO?
The SFO does investigate boiler room frauds but this depends on the seriousness and complexity of the circumstances. If you have information, please contact us on our SFO Confidential hotline at 0207 239 7388 or fill out our reporting form in confidence at https://report.sfo.gov.uk/sfo-confidential---provide-information-in-confidence.aspx
When do we step in? Here's an example:
1. Typically, a boiler room case might involve an operation which has sold you shares in a company, which turn out to be worthless. At this stage, this would be a case for the police.
2. You might become aware that lots of other people have been
defrauded by the same criminal operation. The combined financial
loss would be much larger than first thought, but it might still be
quite a straightforward case.
3. The police may find out that the boiler room has been operating
in another country, with lots of complex transactions between
several countries overseas. At this point, the investigation has
become a lot more complicated. This could be the point where the
police hand the case over to us to take on.
See our acceptance criteria for more information on when we take on cases.
