What’s boiler room fraud?
‘Boiler room’ fraud is an organised criminal activity that is operated by phoney brokers who cold call victims and use high-pressure selling techniques to convince the victim into buying valueless, over priced or non-existent commodities. The organised criminal groups that operate this fraud are usually based overseas and selectively target victims in the UK.
SOCA has identified that these criminals will look to recruit students and young people, to take part in this type of fraud. Fraudsters may look to recruit students by advertising boiler room fraud jobs at recruitment fairs, exhibitions and internet job pages that students use regularly.
The risks associated with taking part in boiler room fraud
Fraudsters will try to make these jobs appear attractive by promoting a potentially large salary, often based in Southern Europe or South East Asia and no need for previous experience in sales. You should be aware of the risks to your future should you take up one of these positions.
If you take a job in one of these boiler rooms you will be complicit in the substantial financial and psychological harm caused to its victims. Under the Fraud Act 2006, it is now no longer necessary to prove deception. All that is required is to prove that the fraudster was dishonest in their behaviour and they intended to make a gain for themselves or cause loss to another. The offence is punishable by up to ten years in prison and/or a fine.
Victims of this fraud often suffer severe financial losses and are sometimes forced to sell their homes. The emotional impact on these people (who are often elderly) can be devastating.
If you happen to come across a job advertisement that offers an unusually high salary with added incentives, you should think carefully before being lured into applying for the job. For more information on boiler room and other types of fraud see www.actionfraud.org.uk.
5 key tips to protect yourself
- Check the company’s contact details (such as a website, address and phone number) are correct and that they are registered in the UK. Don’t be fooled by professional looking websites, many fraudulently-run websites are created by criminals who are proficient in web-design.
- Carefully study the advert. Many illegitimate job advertisements are written in poor English and contain grammatical and spelling mistakes.
- Be particularly wary of job offers from companies who are based overseas as it will be extremely difficult for you to verify who they are.
- If in doubt, speak to a relative, friend or teaching professional about the job offer; seek their honest opinion and advice. You can also check if a company is regulated by the Financial Services Authority by visiting their website at www.fsa.gov.uk.
- And…remember! Be cautious of ‘job advertisements’ claiming to offer an abnormally high salary with little or no requirement for specialist skills and previous work experience – if it sounds too good to be true, then it probably is!
How to report your suspicions
If you think you may have come across a boiler room job advert, you can visit the Action Fraud website at www.actionfraud.org.uk. Here you will find details on how to report fraud via Action Fraud’s website or via telephone or email.
Boiler room recruitment adverts – indicators
The boiler room roles are often advertised as telesales jobs, but there are several indicators that, when seen together, differentiate suspicious adverts.
1. The job may be based in Southern Europe or South East Asia. This is a key indicator as the number of sales jobs in these regions a UK recruitment agency or job board will posses will be limited.
2. The position will typically have a very large salary ranging from £50,000 to £150,000 per annum. This may seem particularly high given the limited experience the adverts will often request.
3. Where relevant the advert may state that the applicant’s flight will be paid for by the company.
4. The advert may state that accommodation will be provided, either long term or for the initial few months of employment.
5. The recruiter will be seeking persons who can handle the high pressure boiler room environment, so may ask for people who are:
- confident and articulate
- target driven
- very keen to earn money fast
- hungry for sales.
6. The commodity on sale will be one that is associated with fraudulent investment scams. Scams vary over time and reflect popular alternative investments in the market. In 2010/11, these included the following:
- carbon credits trading
- land banking
- wine investments
- green energy investments
- shares or similar financial products
- Precious metals.