Given that there are so many scams to look out for, it can be difficult to stay on top of everything. However, there is definitely a need to be aware of the main tactics and strategies used by common scams, because this will improve your chances of avoiding being caught out when it comes to your money. Of all the scams that take place at the moment, boiler room scams may not be the most common but you will find that they have the potential to cause a great deal of damage.
Boiler room scams are traditionally built around people buying shares, but these shares are usually worth nothing or very little. The sales force behind this scam can be very persistent and very persuasive in their arguments. Add this to the human nature of always looking for a good deal and you can see why there is a situation where a boiler room scam can occur. This is why it is very important that people know what to look out for and spotting a boiler room scam will become easier when you know what to look out for.
Does a stockbroker have a reason to call you?
If you receive a phone call out of the blue from a stockbroker, you should automatically be concerned about what is on offer. It may be that you hold stocks and shares and that you have had share dealings in the past, but will this be enough of a reason for a stockbroker to get in touch with you?
You also have to think about the offer that they are looking to provide you with. If the offer is as genuinely as good as it is made out to be, why do they have to hunt down clients in an attempt to make the sale? If an offer is of great value and benefit to the market, you would expect for word to get around quickly. This should lead to people contacting the stockbroker as opposed to them having to get in touch with you.
This isn’t to say that stockbrokers wont contact you or that you won’t receive a good deal in this way but you have to think about how likely it actually is.
How does the “stockbroker” come across?
It can be difficult to ascertain whether a stock broker is genuine or not through their mannerisms or how they speak. This is because boiler room scams are becoming far more sophisticated. People know that stockbrokers should be knowledgeable and well-spoken about their subject or what they are looking to sell. This means that you will find that any fraudsters involved with this part of a boiler room scam will be the same. One difference that you might find will come in the form of persistence shown by the stockbroker. A genuine stockbroker may decide that you are not looking to buy and then decide to cut their losses and move on to the next client.
If the stockbroker refuses to give up and insists that they are only trying to help you find the best deal for your needs, it is very likely that they are looking to commit fraud.
Don’t fall for their lies
One increasingly common element of these boiler room scams has seen the alleged stockbroker threaten people with police action if they do not continue with a transaction that has been initially agreed. Various police forces around the country have issued statements that they will not act in the manner. The selling party will make a number of threats but the chances of them going through with their threats is obviously non-existent because this would only ever shine a light on their actions.
If you have been offered an investment that you feel is a con, get in touch with relevant authorities. Not only can this help you to avoid being bothered by the fraudsters, it may help to prevent other people from being bothered in the same manner.
The fact that boiler room scams can provide a great deal of money to fraudsters means that there will be a lot of people looking to engage in this style of crime. This means that there will be a risk of people being caught out by these crimes. This is why knowing what boiler room scams are and what to look out for can be a massive help to many people in the modern era.
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.