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Investment fraud or 'Boiler room' fraud is a form of scam in which fraudsters offer you fictitious or worthless stocks or financial products.
You are usually contacted unsolicited with an offer for a fantastic deal that promises high returns. The "sellers" put you under heavy pressure, so that you would deposit more and more money (hence the English name "boiler room"). If you go along with this, you will get your hands on fictitious shares or worthless financial products. You will be left penniless.
The scammers work ingeniously. They pretend to be licensed service providers with a professional looking website. They will also make sure that your first investment always seems profitable. That's how they gain your trust. As soon as you are willing to invest higher amounts, things quickly go wrong. The new investments will be loss-making, and when you withdraw your money, it turns out that it is not possible, so to speak. When you realize that your money has disappeared, you may be contacted by lawyers who want to help you recover your money. All you have to do is pay their fees in advance. These are of course the same fraudsters who then disappear again, and you have lost even more money. This is called recovery room fraud. So be careful not to get caught twice!
Investors who have already been defrauded (e.g. boiler room fraud) are contacted unsolicited with the proposal to help them get their money back. The fraudsters contact you online or call you, after which they offer their help to recover your money. Before you get that help, you must first pay a fee or open an account on a trading platform. Despite the promises, you never see your lost money again and you also lose the compensation you paid for the supposed help. The scammers hiding behind a recovery room are often the same as the original scammers. Sometimes it is other fraudsters who have bought lists of fraud victims. If you have ever been a victim of investment fraud, know that the scammers can target you again or resell your data. Be careful: if you have to deposit money before the other party provides a service, then this is fake! When they ask for money first, it should ring a bell: this is a clear indication of a fraudulent offer.
"Be suspicious when the seller promises you a sky-high profit."
Scammers often make it appear that significant profits are being made. It only goes wrong when you ask your investment back. Never invest in a product if you do not fully understand what it entails and always check the information you receive. Be especially suspicious if the seller claims that he can only pay out the winnings after you first deposit an additional sum of money or pay a tax. Managers and directors of companies must be extra vigilant. Many boiler rooms focus specifically on that target group.
Always check the identity of the provider: name, registered office, country of residence, contact details,...
Never trust a provider who cannot clearly identify you. If the company is based outside the EU, be aware that difficulties can arise if you find yourself in a conflict situation and want to take legal action.
Be wary of 'cloned firms': companies that impersonate other, legitimate companies with which they have no connection. Tip: by comparing e-mail addresses or the contact details of both companies, you can detect fraud.
Is someone contacting you online or by phone with a financial offer without your prior request? This is often a fraudulent practice.
Watch out if your contact asks you to transfer money to a bank account in a country other than where the provider is located.
Always ask the provider to provide you with clear and understandable information. Read that information with a critical eye.
If the provider asks for an additional payment, this is often a sign of fraud.
But above all, be vigilant if a seller promises you excessive profit. If a return is too good to be true, it usually is!
Are you a victim of investment fraud or credit fraud and do you not know what to do? Then immediately contact the FSMA (+32(0)2 220 52 11.