Share, bond and boiler room scams

Find out how share and bond scams work, how to avoid them and what to do if you’re scammed.

First published: 10/08/2017 Last updated: 20/03/2023 See all updates

Share and bond scams are often run from ‘boiler rooms’ where fraudsters cold-call investors offering them worthless, overpriced or even non-existent shares or bonds.

Boiler rooms use increasingly sophisticated tactics to approach investors, offering to buy or sell shares in a way that will bring a huge return.

But victims are often left out of pocket – sometimes losing all of their savings or even their family home.

Even experienced investors have been caught out, with the biggest individual loss recorded by the police being £6m.

How share and bond scams work

Share and bond fraud usually comes out of the blue, with scammers cold-calling investors after taking their phone number from publicly available shareholder lists.

The high-pressure sales tactics can also come by email, post, word of mouth or at a seminar.

These scams are sometimes advertised in newspapers, magazines or online as genuine investment opportunities. They may even offer a free research report into a company, or a free gift or discount on their dealing charges.

Scammers also target people searching for investments online through search engines like Google and Bing. They may offer high returns to tempt you into investing, but some may also offer more realistic offers to appear more legitimate. 

You will often be told that you need to make a quick decision or miss out on the deal.

The scammers might also try to sell you shares or bonds in a company that doesn’t exist.

If you already own shares in a company, you may receive a call from someone offering to buy them at a higher price than their market value.

The scam will request the money upfront as a bond or other form of security, which they say they’ll pay back if the sale doesn’t go ahead – but you’ll never hear from them again.

Beware of clone firms

Many fake firms will use the name, firm registration number (FRN), and address of firms and individuals who are FCA authorised. This is called a clone firm. Scammers may even copy legitimate websites, making subtle changes such as changing the phone number. 

How to protect yourself

You should only deal with financial services firms that are authorised by us. 

You should only deal with financial services that are authorised by us. Check our Financial Services Register to find out if a firm is authorised. If you can’t find a firm on the FS Register, call us on 0800 111 6768.

If you use an unauthorised firm, you won’t have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong – and you’re unlikely to get your money back. This includes buying mini-bonds, which are generally risky investments. 

You can check the FCA Warning List for firms to avoid.

Always be wary if you’re contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.

If you're contacted unexpectedly by a financial business or individual, make sure you reply using the contact details on the FS Register. 

Find out more on how to protect yourself from scams.  

You should seriously consider getting financial advice or guidance before investing. MoneyHelper has information on how to find a financial adviser and our InvestSmart pages will help you make better investment decisions. 

If you've been scammed

If you’re worried about a potential scam or you think you may have been contacted by a fraudster, report it to us. Call us on 0800 111 6768 or use our contact form.  

If you’ve already invested in a scam, fraudsters may try and target you again or sell your details to other criminals.

The follow-up scam may be completely separate or related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.

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