We close out Fraud Prevention Month with two investment scams that are both a pack of lies.
Boiler Rooms are another scam that movies and television shows like to highlight quite often. Obviously the move Boiler Room is about it, as is the more recent Leonardo DiCaprio, Martin Scorsese film The Wolf of Wall Street.
Boiler rooms steal money through an onslaught of unsolicited phone calls, or in the Internet age emails and text messages. They promote shares in companies that are soon to be listed on a major stock exchange. Companies in sectors receiving a lot of buzz in the news are often promoted, an example being companies in the ‘.com’ boom in the late 90s. Investors are promised that, once listed, the shares will sky rocket in value.
The catch of course is that these companies don’t exist. Don’t be fooled by company websites, that include news releases, phone numbers, office addresses and even brochures and stationary. Boiler rooms go to great lengths to make things look convincing. Everything seems legit, but it’s all completely fake. By the time the unsuspecting investor realizes this, their money is long gone.
Oil and gas scams started making the rounds in the last decade due to the large and frequent fluctuations in the price of oil and gas. The scam involves getting people to invest in fake oil and gas companies.
Like the boiler rooms, oil and gas scams approach investors through unsolicited phone calls and emails with fake reports of a new opportunity in oil and gas limited partnerships. They will usually name drop large oil and gas companies to make the investment sound legitimate.
Elaborate websites, brochures and research material are often produced in an attempt to add even more legitimacy. Phony drill sites, fake production estimates and non-existent oil and gas deposits are all used to bolster the scam.
Once the fraudsters have investors interested and their money has been obtained they disappear and are never heard from again.
If you ever receive an unsolicited investment opportunity always make sure the person making the offer is legit. This is an easy thing to do online at www.aretheyregistered.ca. You can also contact your provincial regulator to see if the person or firm that has contacted you is registered and has had any sanctions or enforcement proceedings placed on them in the past.