The ways in which people communicate have changed with advancements in technology, and so have the tactics of “cold calling” boiler rooms.
According to FINRA’s National Cause and Financial Crimes program, boiler room operations are still used to pitch dubious investment schemes. Typically run as outbound call centers, boiler rooms are characterized by high pressure sales pitches from promoters targeting retail investors with highly speculative–oftentimes fraudulent–investments. And this goes beyond phone calls; today’s boiler rooms also rely on more modern means to contact potential investors, such as messaging apps and social media.
Regardless of the method of contact, the scammer’s goal is the same: Use high pressure tactics and persuasive language to convince investors to purchase specific investments that will ultimately enrich the scammer.
One investor recently pumped the brakes on a potential boiler room scam when he questioned why a non-registered individual was contacting him, out of the blue, to purchase microcap securities. The individual received a phone call promoting a low-priced security that was trading on the over-the-counter markets. The promoter claimed that the security was on the verge of being listed on a major exchange and this was the investor’s opportunity to get in on the ground floor. The caller instructed the investor to log into their brokerage account and purchase a certain number of shares at a specific price before the…
