MP Toolkit

This MP Toolkit has been designed to provide MP's with information about boiler rooms and how we can help you help your constituents.

What are boiler rooms?

Boiler rooms are illegal organisations, usually located abroad, which obtain copies of share registers and contact shareholders in order to sell them worthless shares. We believe it is copies of registers obtained from Companies House that have been used by boiler rooms for this purpose. In recognition of the need to protect shareholders, the Companies Act 2006 makes access to a register of members subject to a 'proper purpose' test. If a company receives a request, they must either comply or apply to a court to contest the request. However, it is possible that a boiler room may still be able to obtain the information they need if a company thinks it is a genuine request. Larger companies are in a better financial position to challenge requests because of the costs involved. Historical information held in registers and obtained by boiler rooms may also remain relevant for some time.

Why is the ICSA involved in the campaign to combat boiler room scams?

The ICSA Registrars Group started raising awareness of boiler room scams in 2006 as a result of a survey carried out by the FSA which found that among a sample of 100 victims, average losses were £20,000 and some reported losses of over £100,000. A warning template – which is shown below- was produced which can be used by organisations on their websites and in their communications to shareholders.

How can my constituents distinguish between a call about legitimate shares and one from a boiler room?

The sales staff working in boiler rooms are highly trained and even very experienced shareholders have been tricked into buying shares. The advice is as follows:

-obtain the name and contact details of any unsolicited callers and record the date and time of any calls received. Try to establish where the caller obtained their information.

- check that they are properly authorised by the FSA before getting involved. Details of all genuine firms are listed on the FSA’s register - see www.fsa.gov.uk

- don't assume that because their name appears on the FSA's register, the caller is who they say they are. Some callers may use the names of firms or individuals from the register to make them sound legitimate. It's unusual for firms to call out of the blue, so constituents should be wary if they're not expecting a call.

If a constituent has been targeted by a boiler room, what advice do I give them?

Unfortunately, if they have already paid money to a boiler room then the chances of them getting it back are extremely limited. The FSA website has an online reporting form for people who believe they have been the victim of share fraud and boiler room activity. They also operate a consumer contact centre which can be reached on 0300 500 5000. The City of London Police have a national intelligence system on boiler rooms called Operation Archway. See www.cityoflondon.police.uk

What can I do to help prevent boiler room scams in the future?

- Spread the word. The more people that know about boiler room fraud and how to avoid being caught out, the better.

- Encourage firms to use the warning template which can be downloaded here.