According to the Financial Services Authority (FSA) boiler room scams reap about £300 million every year from would be UK investors.
Boiler rooms are usually based in offices overseas with just a few people calling potential investors on the phone to try and persuade them to buy shares in a company.
Smooth boiler room operators
The fraudsters are generally knowledgeable and persistent, calling their victim several times with offers of research, discounts on stocks in small overseas companies, or shares in a firm that is about to float.
Boiler rooms make their money in one of two ways. They might simply take your money and walk away. Or they might sell you shares, but at vastly inflated prices and with exorbitant dealing charges.
Conference tackles boiler room fraud.
The regulator is unable to take action if the boiler room is not based or authorised in Britain, but is now calling on regulators and law enforcement agencies from around the world, including the US Securities and Exchange Commission and the Spanish and German regulators, to help tackle boiler room fraud. Organised by the FSA, the first international boiler room conference at which 20 countries are expected to be represented, takes place today.
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