More and more signs of boiler room fraud and investment fraud
Given the low interest rates on savings accounts, alternatives for making savings yield a return are very popular.
Various financial products come to mind here.
A striking example of this is Forex trading or the foreign exchange market. This is an international market where currencies are traded among themselves. Profits are made in this market by exploiting price differences. You buy currency there in the hope that its relative value will increase against other currencies. An example is trading between the euro and the US dollar. It is also possible to invest in commodities such as oil or gold.
Often, the private investor has to execute transactions via an online trading platform.
The online trading platform is then supposed to act as an intermediary in the transactions.
However, our firm is increasingly being contacted by investors who are seeing their funds lost to fraud in the aforementioned forms of investment. This fraud is called boiler room fraud or investment fraud.
What is boiler room fraud or investment fraud
Investors, often consumers, are lured to a website through either phone calls from call centres or advertisements on websites or social media.
Boiler rooms and boiler room fraud are terms typically used for fraudulent or shady call centres that offer questionable investments and then use all kinds of techniques to apply increasing pressure to invest more. Boiler room fraud is now used more broadly, and other forms of investment fraud where people are lured to invest via social media or websites are also included under this term. Often, operations continue by phone afterwards, and these forms of investment fraud overlap with each other.
The website to which the investor is directed looks very professional and poses as an official service provider. Numerous policies are available, and you can even phone or chat live with advisors. Some websites even offer personal advisors who assist the investor with investment choices. Once on the website, you can effectively trade and invest via an online platform.
Initially, the fraudsters ensure that substantial profits are made, and the investor is encouraged to invest additional funds to increase the return. Our firm is even aware of websites where the investor is offered to withdraw a small amount from the platform to check how reliable the platform is.
If the investor still has funds left at the end of the line or has accumulated profits, which they often try to prevent by generating losses, the fraud manifests itself most clearly. It suddenly becomes virtually impossible to recover the funds. The platform demands, for example, that a minimum number of trades be completed first or that a fee be paid on the recovered funds. Furthermore, this fee must be paid in advance so that the platform extorts additional funds.
Even in the event that the investor has completed all these steps, new and unachievable demands are made. The bottom line is that the investor loses all the invested funds.
The fraudsters act very aggressively and sometimes go as far as attempting to take over the investor’s computer screen to execute transfers themselves.
Our firm is also aware of practices where the investor continues to be harassed even after the fraud. The fraudsters will call the investor under a different name and from a different phone number to say that they have heard that he has been scammed and that they can help recover the money. To do this, the investor obviously has to pay a sum again and is scammed once more.
How do I know which websites are fraudulent?
There are countless investment fraud websites and platforms active, making it impossible to list them all or provide a foolproof technique to unmask them all. However, there are a number of guidelines you can observe to detect and avoid investment fraud or boiler room fraud.
If you have a website in mind where you wish to invest, it is initially advisable to conduct a thorough online check. For known fraudulent websites, you can often already find testimonies from people who have been scammed. These are important warning signs.
You can also look for the company details of the business behind the website. Look for the exact company name, company number and address. In principle, these should be clearly visible on the website of a legitimate investment platform. Then, try to verify these details if possible. In Belgium, for example, it is possible to identify any Belgian company by its name, enterprise number or address via the Crossroads Bank for Enterprises (link).
Possibly, the business also needs to be registered with the banking authority of the country where the company is registered. Check whether a list of permitted (and/or banned) platforms has been drawn up on the website of this banking authority.
Finally, in Belgium, you can turn to the FSMA (Financial Services and Markets Authority). They have also published a list of fraudulent investment sites. Furthermore, they offer for you to contact them yourself if you still have doubts about certain investment websites.
The FSMA catalogued the following websites, among others, as investment fraud or boiler room fraud:
- OMEGA FX: https://www.omegafx.io
- TRADE IDEA: https://www.tradeidea.co
- BEFLIX: https://www.beflix.net
- BLUE LEXUS: https://www.bluelexus.net
- CFReserve: https://www.CFReserve.com
- OPTIONFX: https://www.optionfx.trade
- GBE-CAPITAL: https://www.gbe-capital.com
- JT-EUROPE: https://www.jt-europe.com
- BURTON MILLS: https://www.burtonmills.com
- HOLLIS KOOKMIN FINANCIAL: https://www.hkfglobal.com
- LAMBERT & SONS INCORPORATED: https://www.lambert-incorporated.com
- LOEB BENSON: https://www.loeb-benson.com
- MEADOWS FINANCIAL: https://www.meadowsfinancial.com
- SCHALOM AND GERSON: https://www.schalomandgerson.com
We take action against boiler room fraud and investment fraud
We assist various investors / consumers in their actions against this form of investment fraud or boiler room fraud. Criminally, there are two options. Either a complaint with a civil party claim is filed with the investigating judge, or a complaint is lodged with the police services (see “rectification of fraud“).
The complaint with a civil party claim is in principle recommended because you thereby task an investigating judge with investigating this fraud. However, the investigating judge can request a significant sum to initiate the investigation, which means that a (free) complaint to the police may be more appropriate in some cases.
In addition, it is also always advisable to contact your banking institution.
We believe it is important to bring together various victims so that these fraudulent practices can be investigated with greater impact. In this way, costs can be shared, the priority for the investigators becomes higher, and the investigators have more material to work with.