Glossary: Boiler room

This is an umbrella term for an organisation, usually unlicensed by the financial authorities, which uses forceful, persistent and highly aggressive telephone sales techniques to sell unlisted or non-existent securities to private investors. In the majority of cases, the shares being sold are worthless and the boiler room vanishes, leaving the investor out of pocket. Although they boast impressive UK addresses, the firms operate from boiler room “hotspots”, such as Spain, Switzerland, Dubai, Japan, Bermuda or the US, so they are outside the remit of the Financial Services Authority.

Relevant to: Scams

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