Boiler Room Scams

Boiler Rooms

This type of scams starting point is an unsolicited phone call, to you, to buy shares in a private company that is about to be listed on a major stock exchange. The scammer will state that, once the company goes public, the value of its shares will skyrocket. This company is usually in a sector that’s in the news at the present time. At this time, many of these scams focus on the latest environmentally friendly product or alternative medicine.

The real catch is that the company does not exist. By the time you realize that you’ve been taken advantage of, the scammer will have closed up shop and moved on to another scam. Unfortunately the chances are likely that you will never see your money again.

This specific scam is usually pulled off by a team of scam artists who set up a makeshift office known as a “boiler room.” In order to convince you that the company is real, they will send you to the company’s website to check things out. They may also set up a toll-free number and a business address to create the appearance that the company is legitimate. Be careful because everything on the site could be fake. The toll-free number will go right back to the scam artist, and the address is usually a post office box or temporary office address.

Today’s scammers, see that investors are paying increasing attention to overseas investment opportunities and have created a new generation of scams that have gone international. The most troubling thing about this is a growing pattern of former U.S. boiler room operators who have moved their telephone sales operations outside of the U.S. and Canada to the Bahamas, Panama, Costa Rica, Hong Kong, and even South Africa.

These locations for the boiler rooms are carefully chosen. These scammers are now dialing out of countries that may have no extradition arrangements with North American law enforcement agencies so be careful.

How can you prevent it?

Get the name and phone number of the company for any place that solicits you directly that you are not familiar with.
Check to see if the company is registered with a trade board or commission.
Go to Google or Yahoo answers to do some research in the company before investing. In most cases someone will have posted a blog or two on the company and check out the blog to make sure it’s not someone working in the company.
If your not sure, it’s not something you want to take the chance investing in.
Protect the equity in your Toronto mortgage