Boiler room scams- Warning for Shareholders
"If it sounds too good to be true, it almost certainly is."
What is a boiler room scam?
This is when a fraudster pretending to be a stockbroker tries to sell you shares that are either worthless or non existent. They can be very persistent and persuasive, and cost investors millions of pounds every year - often stemming from an ‘out of the blue’ phone call (or sometimes by post or email).
The shares will usually carry a very high risk, be impossible to sell and are sold to you at an inflated price which does not reflect a company’s true prospects - that is, if the shares are even real. Some fraudsters will simply persuade you to pay a fee upfront and then take the money and run and some may try to purchase your existing shares.
Beware that if you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme (FSCS).
You can avoid becoming a victim of share fraud by:
- Hanging up the telephone if you get an unsolicited phone call offering you shares
- Checking that anyone offering to sell you shares is registered with the FCA
- Calling the company back using the details on the FCA register to verify their identity
- Reporting any company that cold calls you to the FCA on: 0800 111 6768
or by visiting: www.fca.org.uk
For more information on how to avoid share fraud, see the FCA's 'Beware of share fraud' leaflet.