‘Boiler room’ fraud is a type of fraud that involves contacting potential investors – usually unsolicited, often by telephone – offering them a fantastic deal that will supposedly earn them a lot of money.
The fraudsters put consumers under severe pressure (hence the name ‘boiler room’) to pay more and more money. In reality, the consumers end up holding fictitious shares or worthless financial products. The fraudsters disappear with the money, and the investors never recover the amounts invested.
Be vigilant, the fraudsters are very shrewd. They present themselves as authorized financial service providers and have a professional-looking website. They ensure that the first investment always appears profitable. That way, they gain consumers’ confidence. As soon as the latter are prepared to invest higher amounts, things begin to go wrong. The new investments incur losses. If a consumer asks for his or her money back, it turns out to be impossible to do so!
Do you suspect that the offer being made to you may be fraudulent?
Have you been the victim of investment or credit fraud and you don’t know what to do?
If so, please contact the FSMA directly.
Don’t fall into the trap, follow our recommendations!
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Always check the identity of the person or company contacting you (have you checked the name, registered office, home country, contact details and whether it holds an authorization to make you this type of offer?).
If you cannot clearly establish the company’s identity, it should not be trusted. If the company is based outside the European Union, you should be aware of the difficulty of legal recourse in the event of a dispute.
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Be wary as well of ‘cloned firms’.
These are companies that pass themselves off as different, lawful companies even though they in fact have no connection with the latter. A close look at the email addresses or contact details for the companies in question may prove useful in order to detect potential fraud of this sort.
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Be wary of cold calling.
This refers to the practice of contacting you by telephone or email in order to make you a financial offer without your having made a prior request for such contact. Such calls are often indications of an attempt at fraud.
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Be wary of any requests to transfer money to a bank account in a country that is different from the one where the company’s registered office is located.
In the case of boiler room fraud, requests to transfer money are made most often toward accounts opened with banks based in Asia.
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Always ask the person contacting you to provide clear and comprehensible information and take a critical view of the information you are given.
Never invest if you do not understand precisely what is being offered. Be sure always to verify the information you are given.
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Be all the more suspicious if the pay-out of the returns is conditional on an additional payment and/or the payment of a tax.
Such requests are often the signs of fraud.
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Company managers and directors need to be extremely vigilant. Many boiler rooms are targeting those groups in particular.
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Lastly, be wary of (promises of) disproportionate returns.
If a return seems too good to be true, it usually is.