Don't be a victim of boiler room fraud

 In August this year Tomas Wilmot was sentenced to nine years imprisonment and his sons Kevin and Christopher to five years each. They had been found guilty of running a syndicate of boiler rooms that defrauded an estimated 1,700 investors of £27.5 million. The Crown Prosecution Service headed up a huge team effort involving investigating authorities in the UK and across the world to bring the Wilmots to justice.

A boiler room is a scam where fraudsters cold call members of the public by telephone and con them into buying over-priced or even non-existent shares. They are great at hard-sell techniques and can be very successful very quickly. They often cheat small businesses and individuals out of money they have worked long and hard to save. Victims typically lose their whole investment because the fraudsters are not authorised to trade by the FSA (Financial Services Authority), so no compensation is available. It is estimated that every year around 5,000 people in the UK are victims of share fraud.

The Wilmots used a large number of boiler rooms spread across many jurisdictions in Europe and further afield, making it easier to launder the proceeds.  Many of their victims were elderly and some were suffering from serious illnesses and lost money they could ill afford. A retired couple from Gloucestershire in their 70s who lost more than £13,000 were among the people who suffered.

Share scams usually come out of the blue, with fraudsters cold-calling investors after taking their phone number from publicly available shareholder lists. But the high-pressure sales tactics can also come by email, post or an advert in a newspaper promising a genuine investment opportunity. You will often be told that you need to make a quick decision or miss out on the deal.

To protect yourself from this type of fraud, only deal with financial services firms that are authorised by the FSA. Bear in mind that authorised firms are unlikely to contact you out of the blue with an offer to buy or sell shares.

If you are concerned about an investment you have already made, you should stop sending money to the firm or individuals involved. If you have given them your bank account details, tell your bank immediately. Report any suspected share fraud to the police and the FSA. Further information about boiler rooms and share fraud is available on the FSA website: http://www.fsa.gov.uk