The Financial Services Authority (FSA) has warned inexperienced investors to be wary of 'boiler room' scams, which costs on average £20,000.
Investors in London and the southeast are more likely than any other geographic area in the UK to be targeted by boiler rooms – overseas-based high-pressure sellers who call repeatedly in order to flog virtually worthless shares before disappearing with the investors' money.
Over half (58 per cent) of respondents to the FSA survey had fallen victim to a boiler room. In addition, a staggering 13 per cent had been conned more than once, reporting total losses stretching into six-figure sums.
"Boiler rooms can be lucrative operations that fraudulently earn serious money," said Jonathon Phelan, head of retail enforcement at the FSA. "£20,000 is a shocking sum and far more than most people can afford to lose.
"Boiler rooms are not authorised by the FSA, and are based abroad outside our reach, so victims are not protected by the financial services compensation and complaints schemes. Our strongest tool is to make people aware of the scam."
The survey found that older people were the primary target for boiler rooms. Around 64 per cent of victims were aged 51 or over and 41 per cent said they were experienced investors, having been dealing in stocks and shares for over a decade.To read more about investment, click here.
© Adfero Ltd