A PENSIONER who ploughed his savings into shares that never existed has warned others about the dangers of ‘boiler room’ frauds.
Anthony Boothby, of Winton, received a cold call in spring 2011 from a man claiming to be a stockbroker and offering him the opportunity to buy shares in a bio-technology company.
The 74-year-old said he was convinced to invest £5,000 in the company after the well-spoken caller talked him through the details and sent glossy brochures outlining various facets of the business.
“He asked me about my current investments and said I would receive a much better return,” said Mr Boothby.
“They sent me share certificates and a shareholder information pack. I looked them up on the internet too and it all looked very professional and legitimate.”
Happy with his investment after receiving regular newsletters updating him on the company’s progress, which included technical jargon and updates on the latest industry news, the retired plumbing and heating engineer said he received another call from the same ‘broker’ six months later offering him more shares.
Again convinced it sounded like a good idea, he spent another £5,000, thinking he was making a sensible long-term investment.
“I phoned the broker several times to ask how the share price was doing, but was always told he was in a meeting.
“And then one day the line was just dead,” he added.
Mr Boothby reported the company to Action Fraud in May last year, which in turn passed the details on to the police, but because the company is based overseas, he is not covered by UK jurisdiction or compensation.
He said he was motivated to come forward and warn others about these types of scam after police arrested 110 people suspected of profiting from ‘boiler room frauds’ in cities across the world at the end of last month.
Fraudsters are believed to have duped more than 1,000 victims in the UK, many of them pensioners, into handing over large sums. Mr Boothby said he knows he was foolish and would advise anybody else receiving this type of call to just put the phone down.
He added: “I hope my story will save others from getting into the same kind of trouble.”
The term ‘boiler room’ is taken from the cramped rooms used by fraudsters, who then put pressure on would-be investors to buy worthless shares.
Action Fraud advises, like in the case of Mr Boothby, that the scams usually begin with a cold call from a professional-sounding ‘stockbroker’ offering the chance to invest in an attractive share option, often using current market trends to appear more credible.
In Mr Boothby’s case, he was told the second company he invested in was exporting iron ore to China, a subject he had read about in the business press at the time.
The con-artists will also provide bogus research reports and newsletters as well as the share certificates to trick their targets.
If you suspect you are a victim, report it to Action Fraud on 0300 123 2040, break off all contact with the fraudster and alert your bank.