Boiler room schemes

Were you a target of boiler room fraud? Contact us now and begin reclaiming what you deserve.

Start your claim

How does boiler room fraud work?

What exactly is boiler scam fraud?

Boiler room fraud involves unregulated share selling and gets its name from the aggressive, high-pressure sales techniques brokers use.

What places are most likely targeted?

Boiler room frauds often operate from countries like Spain, Bermuda, and the United States, placing them beyond Canada jurisdiction.

In what way does the fraud work?

Boiler room fraud involves aggressive salespeople who pressure victims into buying shares in companies that are either worthless or don’t exist at all.

Ways to steer clear of boiler room scams

Do pump and dump scams have connections to boiler room fraud?

If you receive an unexpected phone call where the caller promises unusually high returns on your investment, it’s very likely that you are being targeted by a boiler room fraud.

Empty guarantees

By promising guaranteed returns, scammers manipulate investors’ emotions, sowing doubt about their decision to wait and instilling a strong fear of missing out on a lucrative opportunity. This psychological pressure often pushes victims to invest hastily without conducting proper research or due diligence.

Taking advantage of emotions

Boiler room scams heavily exploit the emotional vulnerabilities of their targets to secure money. They use aggressive sales tactics such as unsolicited cold calls, applying intense pressure to make quick decisions, and intimidating potential investors.

FAQs

  • Can brokers involved in boiler room fraud be legitimate?

    Typically, brokers involved in boiler room fraud are neither legitimate nor regulated. They often pose as brokers but are actually skilled salespeople with knowledge of shares and investing. Their confident cold-calling style lends an appearance of legitimacy. Many of these individuals have prior experience in the stock and shares market.

    Boiler room fraud brokers are extremely persistent, starting with cold calls and following up multiple times to pressure investors into committing. They may claim a company is about to announce a major breakthrough, suggesting that investing now will raise share prices. Often, they demand immediate payment and may intimidate investors with threats if they don’t comply.

    Such brokers initially provide only positive information about the stocks, discouraging any further investigation. Common sales pitches include phrases like “it’s a guaranteed investment” or “once in a lifetime opportunity” to lure investors. These brokers frequently target middle-aged investors who have previously bought shares, often obtaining their contact details from share registers or databases.

  • Is boiler room scam activity illegal?

    Boiler room scams are illegal in the Canada but the brokers behind them often operate from overseas, beyond the reach of Canada laws. These fraudsters frequently work from different countries such as Spain, Bermuda, Japan, and the United States, etc

  • Are pump and dump scams connected to boiler room fraud?

    Both types of scams involve pressuring people into investments using false promises. In pump and dump schemes, fraudsters boost a stock’s price artificially, then sell their shares for a profit, leaving other investors with worthless stock.

    Boiler room fraud, on the other hand, usually relies on persistent cold calls to push fake or overpriced shares. While both use deceit and aggressive tactics, boiler room scams focus on direct selling, whereas pump and dump schemes create hype to manipulate the market.

  • What steps can I take to avoid boiler room scams?

    Boiler room scams prey heavily on the emotions of their targets to secure money. They use relentless high-pressure sales tactics, including unsolicited cold calls and intimidation, to push their agenda. Despite often having limited real knowledge, scammers project confidence to convince victims. By guaranteeing investors high returns, they create a sense of urgency and doubt, making individuals fear missing out on a lucrative opportunity if they hesitate. If you receive a cold call promising unusually high returns while using these tactics, it is highly likely that you are being targeted by a boiler room fraud.

  • How can you recognize boiler room fraud?

    Boiler room fraud typically shows several warning signs, such as:

    • Being required to pay money upfront or cover unexpected fees before shares are delivered
    • Feeling pressured to commit quickly to purchasing shares or stocks
    • Being asked to keep the investment details confidential
    • Discovering the company is based overseas (Canada law prohibits cold calling investors to sell shares)
Start your claim