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How To Easily Spot a Boiler Room Scam
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Be Aware of 'Cloners'

  • The Boiler Room thieves are starting to shift tactics and impersonate legitimate FSA regulated firms, so called 'cloning'
  • DO NOT TRUST ANYBODY OR ANY FIRM THAT CALLS YOU ABOUT AN INVESTMENT
  • If anyone does call and you want to check them out this is the failsafe way -
  • Go to the FSA website (www.fsa.gov.uk - Tel: 0845 606 1234)
  • Find the member firm's address and then call the person that first called you on the company's main switchboard number - the one listed on the FSA's site
  • If you get through then the original call was legit, if not you were called by a scammer and a thief
  • DO NOT under any circumstances call the person back on a telephone number they gave you
  • Also note that the scammers will often clone a legitimate company's website so don't trust the telephone number on that, only the one from the FSA's site

If you're unsure about anything, and I mean anything, feel free to email me, Alex Green (apg@learnmoney.co.uk)

  • I don't charge
  • I will never ask you for money, and
  • I have nothing to sell you

Helping you to keep hold of your money and stop it being stolen by the scammers is my motivation.


IMPORTANT:

Don't let yourself be
'financially groomed' by the scammers


Stop and THINK!
Strangers do not call and offer easy money unless they're running a scam..........
If you're ever cold called out of the blue by a broker offering great money making trading ideas there's a 99.9% chance you're being setup. The 'broker' in question is a fraud and a thief who only wants to steal your money.

But read these 12 clues and you can easily protect yourself from the scammers.

1. Flashy company name - The company usually has an impressive name, here are some real life examples -

  • CitiCapital INC
  • Westar Royalty Management
  • Conrad Group and Associates
  • Goldberg & Partners, Inc
  • United Capital Mgt., Inc
  • New World Financial Group Ltd
  • Sherman Brothers Mgt. Ltd., Inc
  • Bradford Kempner Mgt. Services, Inc
  • Dukes & Company Securities Corp
  • Newport Pacific Securities & Mgt., Inc
2. Website that tells you nothing

The broker's website will no doubt look very professional but read it and chances are it will tell you absolutely nothing, ie plenty of inane corporate speak about how their clients are important to them and they're dedicated to providing a professional service etc, but nothing about how the company is actually run.

Also, be on the lookout for smiley-happy stock photos of busy high-powered executives - it's normally a sure sign of a setup.

3. How long has the domain been registered

The company's website will often give the impression that the firm has been in business for a long time but if you check on the age of the domain name you will normally find it was registered less than a year ago, and often within the last few months.

This is always a 99% sign that you're speaking to scammers -

4. Excellent salesmen

The salespeople are very professional and polite and they're 'on your side' and they'll say rubbish like 'we only make money Sir if you make money'.

5. Persistent and sometimes very pushy

The salespeople are very persistent, calling many times a week, often with a sense of urgency, ie if you don't invest now the opportunity will be lost

6. Not FSA registered

They won't be registered by the FSA, nor any other Financial Regulator, as they're thieves - check with the FSA here

7. Possible fake Regulator

Often the broker will make it very clear that they are regulated, however the Regulator in question will be nothing but a fake website.

So check out when the 'Regulator's' domain name was first registered, under 2 years ago and it inevitably will be a scam.

8. Bank account problems

If the broker sends you their bank account details, the name of the company to wire cash to will be different to the broker's.

For example, you're called by 'The Greenberg Partnership' but are asked to pay money to 'Devonshire Investments Ltd', plus the bank in question will normally be located in a far-off land.

9. Cheap sounding phone calls

Their telephone calls often sound strange, this is because the scammers use cheap Skype type telephone systems to call from abroad - legitimate brokers will always use proper telephone lines.

10. Dodgy references

They might offer you some present clients to call who'll act as references but of course they'll all be plants and in on the scam - phone them up and they'll only report good things and how the company has made them huge amounts of money.

11. Unmanned Switchboard

Try calling the main telephone number listed on the scammers website during business hours and it's odds-on you'll get an answer phone - proper companies in international finance all have manned switchboards.

12. No links to their website - See who's linking to their website - long established and reputable firms will normally have other similar sites linking to them. Do the following to check -

  • Type this command into Google Link:theirdomainname.com (Note - no www.)
  • So if www.goldman-capital-partners.com is the company in question type the following straight into the search box link:goldmancapital-partners.com
  • Then see how many links are there, and if any who are the sites in question
  • Either there will be very few links, or the links will be from business type directories and article/press release sites - an almost 100% sure sign the company in question is a scammer
Summary

If you're called out of the blue by an 'investment' firm that ticks any of the boxes above then be very careful as the odds are it is a scam.

Be careful of imposter firms

There have been cases where the scammers have called up saying they're XYZ Brokers of London, where XYZ is a fully FSA regulated and legitimate broker. The broker who calls might even call himself the same name as one of their employees.

However, this trick can easily be countered by never using the telephone number the broker gives you. Instead, go to the FSA's website and call the company via their registered switchboard number and ask to be put through to your contact, but of course he won't know anything about you or what you're talking about.

How to get rid of a Boiler Room scammer

Look, you're speaking with an outright thief who only has one goal so why be nice?

They have no respect for you, they're trying to set you up to steal your cash so tell them where to go.

Failure to do this, failure to be firm with them will only lead to problems down the line as you'll remain on their call list and will be targeted a few times a year.

Watch it if your broker 'makes' you money

A new scam the boiler rooms have been using is where the broker first 'makes' you some easy cash before taking you for a much larger amount.

It will work something like this -

  • A customer is cold called, takes the bait and deposits a trial amount of money with the broker, say between £2,000 - £5,000

  • The broker advises the customer to invest in Crude Oil, Gold or currency options and within a week or two the profits are rolling in

  • The client will be sent official looking statements showing all the juicy profits - easy money!

  • However, no trades will have been done, everything has been faked but now the broker has the trust of the client and the client in turn believes he's part of a winning partnership

  • The conman thief, sorry broker, will say -

'let's stop messing around with small money, you know my advice is hot so why not invest £25k or more and then we can double or triple it within a few months'

  • However, pay the big money in and it will be stolen and the thief will disappear
But what about if you're clever, realise what's going on and try to withdraw some or all the 'profits'?

You won't be able to, the broker will make all sorts of excuses about why it's not possible and will probably realise you know what is going on and will disappear with your original investment.

Beware of the double con scam - Offered a large profit for your shares

Sadly many boiler room victims get taken for more money with the double con scam which works like this -

  • You're cold called, fall for the sales patter and buy some stock expecting to make some quick and easy money, at least that is what the scammer will have told you
  • However, after a few months it becomes somewhat clear the stock in question isn't going to rocket in price, in fact chances are it falls sharply
  • But you still don't fully except you're been duped


  • Then, about 6-18 months later somebody will call you explaining they want to buy, or rather they have a very large client in the wings (often they say it's a hedge fund) who wants to buy all the available stock and is offering you a massive profit
  • But to get hold of the big money there will be a small complication in that either you'll be asked to put up say £5,000 into a refundable bond or for paperwork etc, but when that's done the cash will be released
  • Of course, no money will be forthcoming and the £5,000 will again be stolen
  • And the new people calling you up will be the same scammers that duped you in the first place

Summary - Be careful if you've been duped by a boiler room in the past and realise 2 important points -

  1. Sadly the stock you bought will be worthless and there is little if any chance it will be worth anything - the best thing to do is write the loss off and try to forget about it

  2. Everyone and anyone that calls you in the future about your original purchase or indeed any other investment will be connected to the original scammers - so learn from your mistake and tell them where to go
Don't worry if they threaten to sue - it's idle talk
  • Question - have you ever heard of a low-life thief suing in the courts because he couldn't steal someone's money?
  • Answer - of course not, as the thief opens himself up to being arrested and charged

Be on your guard as many of these scammers will try to get a verbal agreement from you to buy shares or investments and then threaten to sue if you don't send the money in. But as indicated above none of these scammers will ever sue for obvious reasons.

My advice is simple, call their bluff, say "fine, I'll see you in court" and then forget about the matter.

Summary

Knowledge is power so goes the old saying and this in turn is the secret to keeping your cash safe from being stolen by the boiler room scammers. The more you research on who you're doing business with the more chance you have of spotting the scam.

The internet is therefore your best friend as there's always plenty of information online that can help spot a scammer within 5-10 minutes. So if you use the simple clues outlined in this article it's virtually impossible to become a victim of a fraud.

Finally, I think the 3 best clues to spotting a boiler room are -

  1. Did they cold call you - If yes, then beware as proper UK registered stockbrokers are not allowed to cold call potential clients

  2. How long has the domain name been registered - if under 2 years then 99% chance scam

  3. Are you asked to send money to an overseas bank account, to a different company name to the broker in question. And often the bank will be located in a suspect (banking) country like Cyprus, Panama or the Far East, especially Hong Kong where the banking regulators do a pathetic job. In fact to me they look as though they're in on the scams, even the big banks

Some might argue that the best way to spot a boiler room operation is to see if they're FSA regulated or not. The trouble is that scammers always lie and are often good at supplying bogus supporting evidence.

However, they can't fake when a domain was first registered and no legitimate UK broker will ask for money to be deposited offshore.

Good luck and above all use common sense to steer clear of the scammers.

Email me if you're unsure about anything
I can spot a scammer and a thief at 1000 yards. So if you're ever unsure about anything please feel free to email me and I'll get the bottom of it.

I'm happy to help you keep hold of your money and of course keep it away from lowlifes and thieves.

Alex Green
apg@learnmoney.co.uk

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