Pensioner loses £230,000 in worthless sharesThieves in Germany tricked him in boiler room scam

01 April 2008

A roll of money

A good adviser can save you time and money

A trading standards chief has sent out a warning after a pensioner was tricked into buying £230,000 of worthless shares.

Thieves in Germany tricked the Dorset man into handing over the cash for shares in a non-existent company.

The man, in his 90s from Shaftesbury, was promised he would make money but lost his entire investment in the shares swindle, known as a boiler room scam.

Boiler room scams

Boiler room scams involve the illegal sale of shares in the UK that are overpriced, restricted for onward sale and have little or no resale value.

Boiler rooms are so called due to the high-pressure sales techniques used to sell shares in risky companies.The fraudsters are mainly based outside the UK and often vanish, leaving the investor out-of-pocket. 

In the latest case, the pensioner reported it to Dorset trading standards officers after the council took part in a nationwide Scamnesty campaign encouraging victims to hand in their postal scams in February.

Scam letters

The aim of the campaign was to raise awareness of how fraudulent businesses prey on their victims by post. 

Several residents contacted officers, including a man from Weymouth who bought a product from a foreign catalogue under the promise of a prize but has since been inundated with - receiving 24 in one day alone.

Ivan Hancock, divisional trading standards manager at Dorset County Council, said: 'In these shocking examples the consumers affected have been given further advice on how to minimise problems in future.

'While investigations are being made into the origin of new scams that have been highlighted during February's Scamnesty, invariably the most effective approach to tackle the problem is through raised public awareness. So many are based abroad or are quick to move on.'

If you're conernced, stay smart with our guide to spotting a scam, and what to do if you come across one.

Fake psychics

A Wimborne pensioner lost several hundred pounds replying to scams from fake psychics and horse racing tipsters in the hope of gaining good fortune.

David Crowhurst, cabinet member for trading standards, said: 'The fact that scams of this sort continue to arise means that people, including the most needy and vulnerable, do fall for them and end up losing what can be quite significant sums of money.'