Boiler room share sellers con £500million a year from British investors
British investors are being conned out of £500 million a year by illegal 'boiler-room' share sellers, according to police.
Last Updated: 6:14PM GMT 11 Nov 2008
Boiler room fraudsters sell bogus, worthless stocks to amateur market players by using sophisticated 'grooming' techniques, particularly targeting the elderly who are trusting and more likely to have large sums to invest.
Share buyers, especially British investors who have a 'share-buying culture', are duped into believing they are investing in soon-to-be floated companies and are promised that there is little or no risk involved.
The fraudsters also pressurise victims into purchasing a capped amount of shares - say 5,000 - because of supposed competition from "private investors".
Now for the first time police and financial authorities in Britain, the US and Spain have launched a co-ordinated operation to tackle the multi-billion pound worldwide problem.
Already closer cross border co-operation has yielded results with two Florida-based Britons arrested in connection with a $70 million dollar scam, which may have cheated up to 20,000 UK residents, and raids on a Hong Kong based boiler house involving $(HK)1.2 billion.
Speaking at the end of a two day conference organised by the FSA Detective Superintendent Bob Wishart, of City Of London police, said the half a billion pounds lost by Britons is just the "tip of the iceberg."
He said: "That £500 million could be invested in the British economy, instead it is funding other forms of criminality."
Det Supt Wishart added: "Older people are being targeted especially because they are more vulnerable and not used to the mass market approach.
"If me or you picked up the phone and heard someone talking nonsense at the other end we'd just hang up. But older people can be a bit lonely and want to talk.
"They groom them carefully, find out what they do, what they like and don't like. Then all it takes is two or three phone calls then they go for the jugular.
"The fraudsters are very sophisticated . . . they use glossy brochures and glossy websites.
"I know of one particular instance where two little old ladies, aged 81 and 84, both living in a little cottage in the country somewhere. They were duped out of £1.6 million. And they were so polite when they reported it.
"They're a personal mission of mine those two ladies - we can't be having that. So it's not just greedy or stupid who get conned. We can't think that."
Boiler room bosses, who have links with organised crime, have escaped justice is because they operate across international borders, so no one police force has had jurisdiction.
The International Boiler-Room Conference meeting, is aimed at improving links between police forces. |
