FRAUD detectives are warning people to be on their guard against fraudsters who have fleeced thousands of pounds from West Yorkshire victims.
The slick swindle is known as `boiler room' fraud because it involves bogus stockbrokers providing themselves with a veil of credibility by renting the smallest available space in a prestigious office complex - often next to the boiler room.
The name also refers to the high-pressure sales tactics of the con artists.
Potential victims are contacted over the phone and offered a get- rich-quick investment opportunity that they will be told they need to snap up quickly or miss out on.
The investment typically involves low-priced and thinly-traded stock issued by the smallest of US firms.
Dishonest brokers buy up large blocks of the stock at a massive discount and then use high-pressure sales tactics to persuade investors to buy it at hugely inflated prices.
Buyers eventually find the shares they have bought are worthless.
Dozens of people have been targeted in West Yorkshire because their names appear on a public list of investors in legitimate firms.
One West Yorkshire victim, who parted with a five-figure sum, said: "I received a telephone call out of the blue and then another person came back to me on the phone asking if I was interested.
"They directed me to their website and I downloaded loads of information to check it all out, but what I didn't realise was it had all been faked.
"They had an answer for every issue I raised and they made it sound so attractive."
The boiler rooms tend to be in financial districts of banking capitals such as Zurich and Geneva.
Elaborate websites prepared by the fraudsters feature profiles and photographs of company executives - all cut and pasted direct from legitimate company websites.
The bogus brokers will even create false hyperlinks to top business news websites where potential investors will see fake articles about the firm or about lucrative contracts its clients are set to win.
The fraudsters have been cashing in by associating themselves with product areas that are booming.
One frequently used is biometrics, where the iris of the eye is scanned to allow access to secure areas.
Det Chief Insp Dave Cooper, who heads West Yorkshire police's economic crime unit, said: "We have had victims who have parted with quite a lot of money - a six figure sum in one case. And it doesn't stop there.
"There is a double whammy on this scam where the investor may then be contacted by a firm with a different name offering to help the victims recover all or some of their losses - for a fee, of course."
