While share scams or boiler room scams are not the most common types of fraud, they can be hugely devastating for the victims. There may be a low success rate for fraudsters carrying out this style of crime but they know that the rewards that come from one or two successful activities more than justifies the time, effort and money they use in setting up this style of crime.
This is why it is useful to be aware of some of the common aspects of a boiler room fraud. These signs will hopefully help you to avoid being a victim of this style of fraud.
The Contact comes through a Cold Call
One of the first warning signs about any offer made to you is how you receive information about the offer. If you receive a phone call from a company that you have never done business with before, this should be a large warning sign about what you are getting into. You will receive an impressive argument regarding the reason the company is calling you, but you need to think about whether a company that has no connection to you or no link would contact you with a brilliant offer.
This isn’t an insult to you but if the company had such a great deal, surely they would have customers of their own that would hold an interest in this sort of deal. Ask yourself:
Why is this company calling me?
How did this company get my number?
If you are unable to think of good answers to your question or the company cannot satisfactorily justify their actions, you should look to end communication by hanging. There is also the chance that the first point of contact may come by email or traditional email, but again, the same questions should apply. If you receive any form of communication from a company you don’t know, be very wary.
The Company has a very Impressive Name
This can be a difficult point for many people to grasp. After all, if a company looking to defraud you had a poor sounding or low quality name, they would stand out and make you aware of them, so they are understandably going to try and present you with a regal and grand sounding name. When you hear the name of the company, you will likely be impressed or at least think that this sounds like a company who would be operating in this field or sector.
It used to be that a big of digging or research online or by asking experts in the industry would immediately flag up the false nature of a company but this is no longer the case. The emergence of the internet has been a hugely positive thing for businesses and people but sadly, it allows fraudsters to create a sense of backstory and credibility to their firm. Just because the company you are speaking to has a website, don’t automatically think that they are legitimate or can be trusted. A good looking website can be constructed in a short period of time, and this means that you should be wary about what you see.
The Firm is based Overseas
Okay, we are now living in a world where business transactions are conducted all across the world and you can buy and sell to countries like Japan, Australia or Brazil as easy as you can buy or sell in the local High Street. However, you’ll find that a company carrying out this style of fraud will be based abroad and this is because it is illegal for a UK based company to undertake cold-calls. Yes, boiler room scams are illegal as well but anyone looking to commit a major fraud will ensure that they aren’t caught out on a technicality or a smaller level of fraud.
It is not as if you should immediately put the phone down on any company calling from abroad, but it is important that you are aware of the added level of risk that comes with dealing with a company that cold calls you from abroad.
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.