An increasing number of UK citizens are receiving unsolicited, high-pressure telephone sales calls from companies offering investment opportunities. They are colloquially known as Boiler Room operations.
26 June 2004
Updated Jan 2007
See also the Alerts section for updated information about boiler rooms.
Anyone who suspects they have been contacted by a boiler room should call the FSA's consumer helpline on 0845 606 1234,
or email firstname.lastname@example.org
Companies claiming to be based in "The Commonwealth", or "The European Union", often boasting impressive or vaguely familiar names, are cold-calling UK citizens offering stock or shares for investments of several thousand pounds. Many of these "investments" are in small companies, which might be listed on NASDAQ, but which might have little or no substance and therefore offer scant prospects of returns. Other offers include speculation in the foreign exchange (FOREX) arena, but this is basically a mug's game and should be left to the banks and major trading institutions - and even they often lose out. These are high risk businesses indeed, and seasoned private investors or speculators avoid such investments.
Many of the companies targeting the UK are not regulated or authorised by the Financial Services Authority, which means that, even if duped investors are able to prove mis-selling, they will not qualify for its compensation scheme and their money will be lost forever, often into the pockets of the "advisors" and their employers.
All investments contain a measure of risk, and some risks are higher than others. That's how the investment world turns, but all speculators should inform themselves as far as possible about the risks, and the potential for both gains and losses. For some tips about researching investment opportunities before you buy, go to the Research section, and use the links to SEC or Pink Sheets to discover the substance underpinning your "golden opportunity" and how it might perform.
If you are uncertain about any investment opportunity, keep a tight hold on your cash, no matter how persuasive the caller might be.
Some owners/operators of boiler room type operations targeting the UK often use the law as a blunt instrument to silence their detractors. Some law firms accede to their clients' instructions to threaten or cajole media sources or critics despite having full knowledge of their clients' activities and intent. These law firms might be otherwise respectable or of substance, skilled in offshore financial matters and tax liability manipulation, but they can risk damaging the reputation of the profession as a whole by their indiscriminate acceptance of such clients into their portfolios. These firms might become the subject of closer scrutiny on UnjustIS. Some candidates for scrutiny might be found on the Dark List.