Police warning over boiler rooms

SUFFOLK police are warning residents to beware of share scams, also known as boiler rooms, after one person lost around �300,000.

Kate McGrath

SUFFOLK police are warning residents to beware of share scams, also known as boiler rooms, after one person lost around �300,000.

At least 20 people in the county fall victim to schemes where thousands of pounds of money is handed over for worthless shares.

Police are currently working with the Serious Fraud Office as well as police forces in the UK and abroad to bring to justice those behind the cons that can total millions of pounds.


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Detective Chief Inspector Steve Mattin said: “If the offer sounds too good to be true then it probably is. You may be approached by phone, post, email or via the internet and offered cheap shares, a free gift, a discount on dealing charges or a free research report into a company you may already hold shares in.

“Or you could receive a call from someone offering to buy your shares at a higher price than their market value and then be asked to pay a bond or security that they say you'll get back if the sale doesn't go ahead.

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“All of these can be the opening they need to get cash from you and they will use hard-sell techniques and bogus websites to convince you to buy from them. It may sound attractive but it is likely to be a scam and if they are not a regulated company you have no way of getting your money back.”

Keith Johnson, an economic crime investigator for Suffolk police who has dealt with many of these cases, said there are a number of ways you can be tricked into handing over cash.

“Boiler room scams often operate from abroad - Spain, the USA, Dubai and Hong Kong for example - and are unregulated entities that approach shareholders of legitimate companies usually offering cheap shares by saying the company is going to float on the stock market in future. The company is often dormant or inactive but could be sold as being particularly environmentally friendly or ethically sound as a way of tempting you to buy in. Callers can be forceful and persistent and will often set up cloned websites in order to trick you into believing it is all genuine. They may also encourage you to send money to cover costs or insurance as part of an advance fee scam.”

The only way you should buy shares is through regulated companies and full details of these can be found on the Financial Services Authority (FSA) website - www.fsa.gov.uk/register .

Report any unsolicited advice to them by calling 0845 606 1234 or visiting www.moneymadeclear.fsa.gov.uk .

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