Boiler room scams on the increase, warns ISE

The ISE has reported a rise in the number of phone calls from shareholders who have been contacted by fraudsters, suggesting boiler room scams are on the rise, according to an ISE spokeswoman.

The spokeswoman said that the fraudsters were operating a sophisticated phishing scam to get shareholders personal banking information.

“These so-called “boiler room” scams are operated by fraudsters who contact investors unexpectedly and offer to buy their shares at prices higher than current market value,” said the spokeswoman.

“These unauthorised individuals and companies obtain investor information and contact details by accessing publicly available shareholder lists. While cold-callingby phone is the most common form of contact they may also use email, post, face-to-face contact or approach investors at seminars.”

The scam operates by offering shareholders a deal that is too good to be true, according to the ISE. Fraudsters offer to purchase shares at two or three times the market value. The offer comes with a request for bank details or money up front as a bond or other form of security, which will be accompanied by a guarantee to pay back the money involved if the sale does not go ahead. This advance fee is part of the scam, according to the spokeswoman.

Shareholders who receive unsolicited call from someone offering to buy their shares should “remain vigilant — if it sounds too good to be true, it probably is”, said the spokeswoman.