The number of boiler room frauds is on the rise, with share scammers using “suckers lists” to target potential victims.
The Financial Services Authority received 5,401 reports of boiler room frauds last year, up from 4,527 in 2010. Some 770 people reported investing in a boiler room scam.
Generally, boiler room fraudsters cold call unsuspecting investors and attempt to dupe them into buying worthless, fictional shares. Whilst they are often based overseas, they can be very convincing, using fictional UK addresses and UK phone numbers to give themselves credibility and even supply sophisticated fake documentation.