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Authorities urged to do more to tackle boiler room fraud

Philip Milton, managing director of Devon-based Philip J Milton & Company, said while he welcomed recent police and regulatory action against boiler room fraud, he was “angry” that action has taken so long.

He said his firm has been reporting these scams to the police and the relevant regulatory authorities “for many years”.

“Yet figures suggest that millions of pounds have been stolen in various frauds, and frequently it is vulnerable people who have lost the money.

“We have alerted the authorities to all types of pure scams over the years and those where it is clear there will be troubles ahead. Do they seem to take any action? Their action should be two-fold: stop the scams immediately and investigate those caught so far, and save others from being defrauded afterwards.”

His comments came as the City of London Police announced details of a cross-border investigation, carried out in February, where police conducted a series of raids in London, Barcelona, the US and Serbia in a bid to break up a suspected boiler room operation. According to a statement from the police, 110 alleged fraudsters were held.

The statement said that 850 British victims, many of them pensioners, had been identified. Their total losses are estimated to be around £15m.

At the beginning of February, Kent-based adviser Andrew Oliver, said he had been “bombarded” with cold-calls about investments, pension reviews and payment protection insurance, and warned clients not to do any business over the phone.

His comments followed news in February from financial planner Andy Baker, of Cheshire-based Equilibrium Asset Management, who warned that pensioners are most vulnerable to cold-calling scams.

Mr Baker said he had discovered that one of his elderly clients had lost £20,000 from an alleged boiler room, after he bought shares over the phone, only to find that he was unable to sell the shares at a later date.

Adviser view

Julie Bayley, principal of Cumbria-based Eden Financial Planning, said: “I had someone cold-call me offering me a free pensions review. Even after I laughed and told them I was a fully regulated IFA, the caller persisted.

“I haven’t had any clients caught up in these scams, but such calls have prompted some old clients and new people to contact me for advice as a result of such calls.”