These high-pressure sales firms, often based overseas, target investors illegally, offering them non-tradable, overpriced or even non-existent shares.
The FSA and ICSA have produced an updated version of a free leaflet with warnings about boiler rooms for listed companies to send to their shareholders.
It includes information on how to identify a boiler room and what to do when they contact you. The FSA, with the assistance of share registrars, is also writing to individual listed companies to encourage them to send out the leaflets.
FSA head of retail enforcement Jonathan Phelan says: “Boiler rooms remain a significant problem in the UK and people lose a shocking amount of money to these scams every year. Shareholders are targeted heavily in these scams and raising awareness is the most effective way of putting these companies out of business. It is in everyone’s interest to ensure that people only deal with authorised brokers when buying shares.”
ICSA’s Registrars Group chairman Andy Cotter says: “The ICSA, its associated registrars, and many listed companies have made sustained efforts to make sure shareholders understand the risks that boiler rooms present. No company wants its register used to target unsuspecting shareholders with high pressure sales offers – which is why I am confident that businesses will help by passing on the advice to their shareholders, either via postal mailings or online.”