Not everyone is aware of what boiler room fraud is but it may be something that is more common than you would think. If you have ever received a cold-call from a company offering you a great investment opportunity, you should be a little bit cautious. It may be that this is a genuine opportunity, but there is also a very strong opportunity that it may be a fraudster trying to take money from you.
These are all very common signs of a share fraud or boiler room scam, so make sure that you are on the lookout for these scams. It may be that you don’t notice all of these points but even one of these aspects should be a concern and if you note a number of these points arising, you should be extremely wary.
- This is the first contact you have had with this person or company
- The company has a name that sounds impressive and relevant
- You will be promised a great return for your investment
- The contact person claims to have “inside knowledge” of the business/market/company
- You will be informed that there is 0% risk involved with this investment
- You will be pressured to invest there and then
- You will be asked to tell no one about the offer
- You will be asked to pay upfront
- The contact person will ask you for your bank details
One of the things you should bear in mind is that if you feel uncomfortable, there is nothing to stop you from ending the conversation or hanging up. You should look to be as polite as you possibly can but equally, you have received a cold call from someone who doesn’t have your permission to do so, which means that you are not at liberty to continue the conversation.
Do you really want to Invest?
You also need to think about your own finances and determine what an investment would mean to you. Are you actively looking to invest money or is this something that has been presented to you and you think that it is too good an offer to pass up. While there are investments that can provide you with a great return for your money, the sad fact of the matter is that these are few and far between. There is no getting away from the old saying of “if an offer appears too good to be true, it normally is” and this is something that you should always bear in mind. By all means think about investment opportunities but every opportunity is a risk, no matter how appealing it is.
This is something that should jump out at you if you are informed that there is no risk of investment. A reliable and reputable investment company would never tell an investor that there was 0% risk involved with an investment. This is not the way a reliable company acts; in fact, they would be far more likely to spend time telling you of the dangers and risks involved with investment. This isn’t because they are trying to scare you off from investing, but they do want to make sure that you feel confident about what you are putting your money into.
Be wary of High pressure selling tactics
While there are legitimate companies that undertake high pressure selling, this is one of the most common features of a boiler room fraud. The person contacting you knows that if you go off the call without providing them with money or details, it is likely that the sale will not be concluded. This is because you may think it over and realise that this isn’t a sound investment, you may talk with other people who will point out the danger of this type of investment or you may even carry out some research online and find that other people have raised concerns and issues about this style of fraud. If a caller is placing you under great pressure to conclude a deal or invest there and then, it is always best to say no. There may be a slim chance you miss the investment opportunity of a lifetime but in all likelihood, it is likely that you will be doing yourself a great favour.
You don’t need to be a defence solicitor to understand what constitutes a boiler room fraud. Availing yourself of the most common aspects of this style of fraud will put you in a better position to avoid being a victim of boiler room fraud.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.