Don't fall for the 'boiler room' scam

29th April 2009 

No doubt your attention will have been drawn to media articles on the subject of 'boiler room' scams. We hope no Informed Choice client, advocate or enquirer will ever be taken in by these fraudsters.

Put simply, they call up unsuspecting individuals and target them for the sale of worthless or even non-existent company shares.  Sometimes it is not even the hard sale as quite a few of them are skilled at generating a real rapport with their intended victim.

City of London Police believe such scams have taken literally hundreds of millions of pounds from unsuspecting investors.  

Here are our 'top tips' to avoid becoming a victim:

1 - Only ever deal with an adviser or broker who is regulated in the UK by the Financial Services Authority (FSA).  You can check that they are registered by using the FSA Register at www.fsa.gov.uk.

2 - If something seems too good to be true it usually is!  No professional adviser or broker would ever profess to you that a 'share' is going to significantly increase in value - how would they know that?!

3 - Don't invest money that you absolutely cannot afford to lose.  Just because some of your portfolio has done well (which is less likely to have happened in recent years) it doesn't mean you should invest more in the same investments.

4 - Get advice.  Talk to other people and get their opinion.  Get a sense check on what you are being offered.

5 - Check out the shares you are being offered on the Internet.  What evidence is there that they really do exist?  In the main you should be investing in well known recognisable companies.  Remember that some fraudsters will go the extra mile and set up fake websites to collaborate their claims, so make sure you only use reputable online sources.

If you have any doubts do call us and we will be glad to help you.

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don't fall for the 'boiler room' scam