Fact CheckedLast Updated on January 23, 2022 by Stephan Lindburg
According to UK’s Action Fraud, which is the national center for reporting fraud and cyber crime, a total of £2.35 Billion were lost as a result of financial fraud or scams. Out of that £171m, were contributed to boiler room fraud and £318m account of other types of financial investment schemes. In 2020 the number stood at £1.8 Billion, so you don’t need to be a math whiz to understand what the trend is.
If we check with ASIC, which is the financial regulatory body in Australia, the amount of financial scams in 2021 nearly doubled, with reported fraud growing at around 200% compared to previous years. The same is true for other countries such as Germany, Austria, Sweden, Norway, Canada, and The Netherlands. The regulators agree that the main contributing factor for this upward trend has to due with the Covid-19 pandemic, and the fact that many people are at home with free time on their hands.
What Is A Boiler Room Scam?
Boiler rooms are essentially call centers with sales reps operating on a short leash, low salaries, and massive bonuses. These bonuses are designed to incentivize the sales people in order to get them to sell more. Without exception, all of these sales people have daily, weekly, and monthly objectives. If they don’t meet these objectives they are quickly replaced by other individuals who don’t really care about your financial well-being.
CFD (Contracts For Difference) Scams
CFD’s are similar to Boiler Room scams in the sense that there are agents posing as legitimate Brokers contacting victims from call centers. In most cases these call centers will be located in dubious legal jurisdictions like Bulgaria, Estonia, or Seychelles. CFD brokers are offshoots of the fraudulent Binary Options industry, which has mostly evaporated due to regulatory crackdowns and bad reputation. In this context its worth pointing out that there are quite a few legitimate and regulated CFD brokers which operated legally. However, there are many shady operations that spring up like mushrooms during winter and shut down after they are exposed be review websites like ours.
HYIP’s or High Yield Investment Programs
These are actually Ponzi Schemes that offer incredibly high returns on investments, but eventually the whole pyramid collapses and the service goes bust. The people who really make the money are the scammers who started the scheme and the first investors. The rest lose the money.
There are other forms of scams such as Mortgage scams, fake charities, bogus debt collection or recovery schemes, identity theft, phishing scams, and many others we simply wont discuss. However, we would like to warn all our members and viewers to be extra vigilant and avoid clicking any links sent to you via SMS from sources you don’t recognize. Watch your email as well, there are a lot of viruses being spread these days and they are designed to spy on you or in some cases there is malware which is designed to cause damage to your computer or device.
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