Protect Your Hard-Earned Money by Learning How Boiler Room Scams Work
Understanding the tactics scammers use is an important step to take when protecting yourself from becoming a victim of investment fraud.
The Financial Industry Regulatory Authority (FINRA) recently published an article that discussed some of the tactics used in telephone boiler room scams. In the article, FINRA focused on one victim in particular who lost an estimated $500,000 after falling prey to multiple telephone investment scams.
The victim, a 70-year-old rancher living in Washington State, is far from the only person suckered in by enticing offers and promises of financial gain in return for a simple investment. Cold call scams are popular among fraudsters because of how successful they can be.
According to FINRA’s article, the National Telemarketing Victim Call Center and the AARP Foundation are working to combat this by turning the techniques used in boiler room scams to their advantage. Back in 2012, these organizations created a network called Fraud Fighter Call Centers, funded by the FINRA Investor Education Foundation, that use what they refer to as a “reverse boiler room” approach. The organizations contact particularly vulnerable targets, warn them about investment scams, and arm them with tools they can use to protect themselves.
These call centers identify targets who are likely to end up on what are known as “mooch lists,” which are frequently put together and shared among scammers. These lists provide detailed financial and personal information of people who are either likely to, or already have, fallen prey to an investment scam. Trained volunteers call people identified in order to warn them about these con artists and provide fraud prevention counseling.
Research conducted by the FINRA Foundation discovered that more than 80 percent of people contacted reported having been solicited to participate in potentially fraudulent offerings, and more than one in ten reported losing a considerable sum of money after investing. Another study conducted by the Stanford Center on Longevity estimated that financial fraud brings in approximately $50 billion for scammers every year.
At Meyer Wilson, our investment fraud lawyers have spent years working with people who were the victim on scams. Through our efforts, we have secured more than $350 million in verdicts and settlements, and continue to fight for the rights of each client we take on. Fill out our online form to set up a free case consultation with one of our lawyers today, or give us a call at one of our offices located across the country to speak with a member of our firm and learn more about what we can do for you.