Boiler Room

A boiler room is a type of scam that aims to defraud investors through dishonest sales tactics or stock fraud.

This scam is commonly conducted through outbound call centers involving questionable investments, under the guile of falsified information and posing as a legitimate entity.

Typically, boiler rooms can target experienced and novice investors alike.

Through cold-calling techniques, scammers will reach out to individuals claiming to be a salesperson and offering shares in a specific company.

While commonly associated with phones, contact can be made through any medium such as email or in person as well.

All boiler room scams follow the same basic principles and should be treated with extreme caution. This includes aggressive sales tactics or very high promised returns.

Victims are also pressured for a quick decision at the risk of “missing out” on investments.

Additionally, in most instances the company the victim is expected to buy shares in is generally unknown to them.

This is often due to the company not existing at all.

Finally, the victim is often asked to transfer money for the shares to an overseas bank account, though use of domestic bank accounts is not unheard of.

Are You at Risk of a Boiler Room Scam?

Unfortunately, boiler room scams are not localized to a single region or jurisdiction and can occur seemingly anywhere.

Scammers will look to profit from victims either by stealing your money without actually providing the shares.

However, sometimes scammers can issue seemingly valid share certificates, or by selling you genuine shares at highly inflated prices.

Another dimension of boiler room scams is the risk associated with any contact with such fraudsters.

Any and all contact details shared with these scams are assumed compromised and can be shared or sold to other fraudsters.

This can lead to an increased risk of being targeted by other related investment scams.