BBC News reports a father and daughter have been accused of a $70 million share scam. The pair are suspected of conning some 15,000 UK residents (mostly seniors) into parting with cash for worthless stock in dormant companies.
So-called boiler room scams are all too common. It’s rare for the perpetrators to be caught, and even rarer for victims to get their money back.
The most common form of the scam is an unsolicited telephone call claiming to be from an offshore broker. The caller claims to have inside information that a stock is about to take off and uses high-pressure selling to persuade victims to invest. Often (but by no means always) the stocks are hi-tech or pharmaceutical companies that have made a yet-to-be-announced breakthrough.
In some cases the stocks being touted are genuine, but struggling, companies that the brokerage has bought cheap. It simply wishes to stimulate interest so the price will rise and it can dump its holding at a profit, the buyer being left with neat worthless stock. In the worst cases the stocks don’t even exist, and the scammers disappear once they get your money.
If you receive unsolicited sales calls, I suggest you tell the caller politely but firmly that you’re not interested and put the phone down. Likewise, unsolicited mail and email should be discarded. You can try to limit the number of such communications by exercising caution in who you give your personal details to. You may also want to check if your country has a voluntary opt-out scheme for direct selling by phone and/or mail. But boiler room scammers can be amazingly clever at trackng down potential victims.
The problem for many is that greed tends to overcome common sense. But think for a moment, if you had a sure-fire winner would you share it with complete strangers? Not likely. As the old adage says, if it sounds too good to be true it probably is!
