Investment scams

Boiler room scams – six signs from a scammer’s script

Boiler room scammers often follow scripts designed to use psychology to manipulate the investor into purchasing. Below are six ‘red flags’ to watch out for, including some typical dialogue from real life cold-call scripts

Grant Thornton has been appointed as liquidator over a number of boiler room scams. In some cases we have seized the company books and records, revealing scripts followed by the staff ensuring victims are sold shares or commodities at highly inflated rates or more alarmingly that do not exist.

1. You don’t know the person on the other end of the phone

Generally speaking, reputable companies rarely call to discuss investments over the phone or if they do, you will speak with somebody you know.

A key warning sign is that a stranger is calling you and fishing for your personal information. They may also inquire about your preferences or offer to provide reading materials so they have an opportunity to call you again.

“Good morning/afternoon. My name is [X] from [company].
We've not spoken before, this is a quick courtesy call to introduce myself and to request your consent to send some free press information/a brochure on the fine wine market and how it's been outperforming stocks, property and land for over 30 years whilst remaining capital gains tax free.”

2. It sounds too good to be true

The old saying, ‘if it sounds too good to be true, it probably is’ applies. Scammers will offer very attractive and unrealistic returns on your investment.

"….. like most successful investors capital growth is the main thing you look for from your holdings, -- is that right? Would you be quite pleased if all your investments returned you 30-50% per annum as a starting figure?"

3. They use press stories to justify their claims

Considering they are selling shares that do not exist, or selling worthless shares at a wildly inflated rate the scammer turns to recent press stories to make people feel at ease.

“Are you a Guardian reader by any chance?

It's just that the market for fine wine has recently had a lot of coverage following the sale of a collection which fetched £2 million at an auction house."

The caller suggests his explanation of recent press stories or statistics is proof of the returns available and starts to tell you how you feel.

“I can see you understand why I have been explaining the background and being able to offer you proof from third party evidence is vitally important to you isn't it?”

4. Offering large investment ranges

The scammers are looking to swindle as much money as possible. By offering large investment ranges they are testing your appetite to invest. 

“Of course given the superiority of the wines we deal in; a typical client spend is anywhere from £5,000 to £50,000. That is within your normal/potential dealing range isn't it?”

5. Flattery – so you don’t look to others for advice

Turning to friends, family or financial advisers would really get in the scammer’s way.  By talking about your potential investment you may figure out that this in fact a scam. The scammer flatters the individual to make sure that they don’t turn to others for advice and get found out.

“so I take it you trust your own good judgement at that dealing range, I mean you don't have to consult your wife/husband, financial adviser or any other third party, is that the case?”

6. The investment must be made quickly, or you will miss out

Offering deals that must be made in a hurry, the scammer plays on the investor’s fear of missing out. By pressuring them to act quickly within their comfortable investment range the scammer is more likely to close the deal before the investor does further research. 

"We both know there would be no point in me recommending a wine above your dealing range. That would be a waste of both of our time, so I always try to match the wines available to my client's comfortable liquid dealing range.

You see due to the nature of the market we specialise in when premier wines become available they tend to be traded very quickly with investors lacking liquidity often missing out.”

As with any cold-call or offer to invest always be wary and seek advice. Grant Thornton UK LLP has been appointed liquidator over a number of these scams and our pages offer practical tips and links to associations that can help. 

If you believe you have been victim to a scam, please send us an email: AssetTracingRecovery@uk.gt.com