Investors claw back £1m from boiler room scam

Over 150 British investors have been able to get over £1 million back from a Canadian boiler room swindle.

UK investors were targeted by various boiler rooms – unregulated share dealing operations selling often worthless or nonexistent shares – offering shares in two firms called Rocky Mountain Gold Mining Corporation and Rocky Mountain Gold Mining.

Around £1.25 million had been sent by UK-based investors to the boiler rooms.

The Financial Services Authority (FSA) said in this case the victims were fortunate to see their cash returned – as the criminals behind boiler rooms usually set themselves up to avoid detection and move on quickly before a scam can be uncovered.

Jonathan Phelan, head of the FSA's Enforcement division, said: "This is a rare bit of good news for investors who have been persuaded to hand over money to boiler rooms as usually the money disappears without a trace.

"Investors are reminded to just hang up the phone when contacted by boiler rooms as in most cases these investments do not have a happy ending."

Some 90 per cent of money sent to Rocky Mountain will be returned and further payouts are likely.

Anyone who has bought shares in Rocky Mountain Gold Mining Corporation or Rocky Mountain Gold Mining and sent money directly to Ontario could be entitled to a refund and should contact the FSA.

The average boiler room victim loses £20,000 and firms often target older male investors with a degree of investment experience. Curiously those stung by a boiler room are more likely to be conned again.

Boiler rooms cold call investors – often repeatedly so – with offers of shares in a firm due to be listed. The advice is to steer clear of any unsolicited calls and offers.