I’ve not written a security blog post for a while but after receiving multiple of these calls, I figured I would do a blog about the Boiler Room scam. Please, remember, that any advice in this blog is just information. I link to a few sites that have more information, and in some cases, these sites advise the best way of reporting.
Boiler Room Scam?
I’ve received numerous calls on my mobile (despite previously registering for the DNC list) where the person claims that they can see that I have applied for a trading account and they can help me with setting up my portfolio with some amazing investments in share portfolios.
Obviously, this struck me as weird. I haven’t applied for any trading accounts recently, and those I have, I know what they are.
It’s at this time, I normally tell the person I don’t have the time and to not call back as I’m not interested.
So, I decided to investigate what these calls are and discovered that they were known as a boiler room scam.
The name
The first thing that interested me about this scam was the name. Why was it called what it’s called?
I found out that it’s because of the high pressure sales tactics used for risky or worthless investments. Investopedia gives a great run down of scam and the operation.
So, what can you do?
As with most scams, if it seems too good to be true, it usually is.
If you get one of these calls, these questions will hopefully help you identify it before you lose money to the scam.
- Did you receive this opportunity through a cold call?
- Do they claim to have insider knowledge but won’t tell you what it is or how they got it?
- Have you been asked to keep the call confidential?
- Are they pressuring you to buy then and there?
- Have they asked you to pay upfront and provide them with your bank details?
If it’s tempting, but you’re feeling uncertain, check out MoneySmart’s list of unlicensed companies; while the list isn’t complete, it’s a good start.
Take your time to decide. Rush tactics and scarcity tactics are used to keep you from thinking too much.
I’d recommend reading up on the scam, including MoneySmart’s case study of how the scam works and the risk involved. Also, read ScamWatch’s information about how the scam works and the steps to take to report it.
If you fall victim to this type of call, I recommend making a report to the police. It’s the best way to get the help you need, and will provide you with some protection from further losses. ScamWatch also recommends for this type of scam, report it to ASIC.
