Boiler room scams cost £20,000

Share This:

• 

Text size: A A A

Brits who fall for boiler room scams are at danger of losing large sums of money, according to a new report.

The Financial Services Authority (FSA) has stated that people who are persuaded to buy almost worthless shares through the scams lose an average of £20,000, although three of those surveyed admitted to having lost over £100,000 each.

These scams involve aggressive marketing techniques from overseas businesses that trick investors in to buying overpriced shares.

The scammers are believed to generally prey on older people, with 38 per cent of victims over the age of 60.

Surprisingly, many of the victims are thought to be experienced investors, with 41 per cent saying they had been investing for over 11 years.

Jonathan Phelan, in charge of retail enforcement at the FSA, commented: "Sadly, victims are unlikely to see their money again because their shares will have been overpriced and nearly impossible to sell.

"Boiler rooms are not authorised by the FSA and are based abroad outside our reach, so victims are not protected by the financial services compensation and complaints schemes."

The boiler room operators are persistent, with 49 per cent of victims stating they were called at least four times before handing over any money.


© Adfero Ltd

Important Notice
This guide is intended for general information only and is not intended as, and does not constitute, any form of advice, recommendation or endorsement by us of any particular product(s) or services and you should rely on your own further research and professional advice in relation to your specific requirements and circumstances before purchasing any products or services. Use of this guide is subject to the Terms of Use of the KnowYourMoney site.