As seen in the Movie Boiler Room, Boiler rooms are rooms that the sales pitch is so hot it boils. These boiler room scams happen to many Singapore and Malaysian People.
In business, the term boiler room refers to an outbound call center selling questionable investments by telephone. It typically refers to a room where salesmen work using unfair, dishonest sales tactics, sometimes selling penny stocks, private placements, Asian Fine Diamonds or committing outright stock fraud. The term carries a negative connotation, and is often used to imply high-pressure sales tactics and, sometimes, poor working conditions.
The scam: Bogus stockbrokers offer to buy or sell shares with the promise of big returns – only for victims to discover shares are worthless or non-existent.
How it works: Scammers, often based in ‘boiler rooms’ abroad, cold-call novice and experienced investors after taking phone numbers from public shareholder lists. But people can be targeted by other means. Using high-pressure sales techniques, professional-sounding stockbrokers may offer free research reports into a company you hold shares in, a gift or discount on dealing charges, or ‘secret’ stock tips. You’ll be pressured into quick decisions.
Why it’s a scam: The FCA regulates stockbrokers in the UK, and authorised firms are unlikely to cold call you. Offers to buy shares you already own at well above market value will be bogus.
How to invest legitimately: Check whether a company is authorised at www.fca.org.uk/register. If it’s not, don’t invest. Use a registered company instead.