TIM DREW: Beware of potential '˜boiler room' cold-callers
Every year in the UK, an estimated Â£1.2billion is lost to investment fraud and, according to the Financial Conduct Authority, those most likely to be victims of fraud are aged over 65.
But only ten per cent of such crimes are reported, meaning that the number of people affected by investment scams is, in reality, much higher.
Even experienced investors have been known to fall victim to “boiler room” fraudsters, who often come across as being professional, knowledgeable and trustworthy.
They sometimes establish contact with their targets by offering to provide research reports on companies of which the targets are shareholders, but usually tend to use cold-calling tactics, using high-pressure techniques to rush their would-be victims into making a quick decision.
Some firms may disguise a cold-call by sending you, or saying that they have sent you, uninvited emails or promotional brochures. Because many “boiler rooms” are run from abroad, though they may have offices in the UK, they are not covered by UK jurisdiction or compensation schemes.
One thing to remember is that all UK stockbrokers must be authorised by the Financial Conduct Authority (FCA) and that it is illegal for such firms to cold-call customers. All firms so authorised are listed on the FCA’s register.
The best thing to do on receiving a call from these crooks is to hang up, but they can be persistent. I myself have received a number of such calls and usually they hang up themselves when asked if they are authorised by the FCA.
However, the representative of one “boiler room” informed me that this was indeed the case and asked me if I would like its number. On being told that it was illegal for authorised firms to cold-call customers, and then asked for the name of his firm, the caller hung up immediately.
The Central Ward Neighbourhood Panel will meet at the Ardington Hotel, Steyne Gardens, this evening (September 15) at 6.30pm.
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