BEWARE THE “BOILER ROOM” SCAM!

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BEWARE THE
BEWARE THE "BOILER ROOM" SCAM!

Boiler rooms are entities that offer and provide investment services without
being registered with the corresponding supervisor (CNMV in the case of
Spain). Therefore, they are not authorized to operate in the market.

The risk of these entities lies in the fact that, in most cases, the apparent
provision of such services is only a cover-up to allow them to take ownership of
victims’ capital, with the promise that they will achieve a high return on the
investment of their savings. Although, at times, it is possible to receive positive
results during the first few months, the company will then disappear and not
return the money to its clients.

CNMV continuously engages in monitoring and controlling endeavours in
conjunction with its European counterparts, issuing national and international
alerts every week.

The profile of those affected is professionals and retirees with savings and
willingness. The message it is focused to obtain greater benefits for their
savings than those offered by the conventional market. Many are
holidaymakers or residents in tourist areas on the Spanish coast such as the
Costa Brava, Costa del Sol, Costa Blanca and the Balearic Islands.

Various networks have been dismantled by the National Police in recent
years. Some examples are a boiler room that operated from Benidorm which
defrauded investors from Germany, Austria, Slovenia and the Netherlands;
the network of boiler rooms in Malaga and Barcelona that defrauded 5,000
people. Also noteworthy is another case in which more than 50 people were
arrested due to an investment scam in Marbella, which was under
investigation by Scotland Yard, since the victims were from the United
Kingdom.

Be extremely cautious, because these entities are very active in tourist
areas on the Spanish coast.

Be wary of them during the Summer. Tourist areas on the Spanish coast have
historically been places chosen by some non-registered entities to deploy their fraudulent activities.

The profile of those affected is professionals and retirees with savings and
willingness. The message it is focused to obtain greater benefits for their
savings than those offered by the conventional market. Many are
holidaymakers or residents in tourist areas on the Spanish coast such as the
Costa Brava, Costa del Sol, Costa Blanca and the Balearic Islands.

Various networks have been dismantled by the National Police in recent
years. Some examples are a boiler room that operated from Benidorm which
defrauded investors from Germany, Austria, Slovenia and the Netherlands;
the network of boiler rooms in Malaga and Barcelona that defrauded 5,000
people. Also noteworthy is another case in which more than 50 people were
arrested due to an investment scam in Marbella, which was under
investigation by Scotland Yard, since the victims were from the United
Kingdom.

Why is it necessary to intensify precautions?

During the summer the influx of tourists in the Spanish coast in general
increases. Precisely during this period there is a greater risk of being contacted
by a boiler room, although the danger still persists throughout the year. Phone
calls and emails are followed by increasingly aggressive tactics of contacting
people to capture victims. They also look for their potential targets in large
hotels or in social centres where these collectives gather.

The modus operandi is almost always the same: first they call or make
contact by e-mail to sound clients out, introducing themselves as
authorized entities. Then, they contact people a second time, where they
offer financial products with a clear investment proposal. Once they have
won a client over by using more aggressive tactics, the transaction is
carried out.

Invitations to no-obligation meetings or information sessions in hotels
where there are potential clients are the most recurrent methods used to
close a fraudulent deal these days.

Sometimes they earn clients’ trust by speaking in their language (English,
French, German, Russian, etc.) and also through attractive websites with
a myriad of information, which show the listed companies with whom
they supposedly work.

In the event of suspicion by victims or after a warning by CNMV, those
responsible for the entity will disappear without a trace.

What to do?

If they contact you, report this to CNMV in order for it to act as soon as
possible, calling CNMV’s Investor Assistance phone number 900535015 or
sending an enquiry using the form that can be found in CNMV’s Investor
section. In addition, check if the entity is registered or has been the subject of
warnings.

In the event of a suspected case of fraud contact CNMV and report the
incident to the Police or the corresponding Court.

 

 

 

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