As SMSFs continue to increase in popularity, there is an elevated risk that SMSF assets will be exposed to theft and fraud via boiler room arrangements.
You may be tempted the boiler room.
The techniques employed by boiler room operators is often after making a small initial contribution, the investor will be contacted or given access to a website that shows the performance of their investments.
The website will show that the victims investment has grown substantially and the person on the phone will attempt to convince them to commit more and more funds with promises of even greater returns or incentives such as a heavy discount that is only offered for a limited time.
The victims continue to believe that their investments are growing until they either make an attempt to withdraw all or part of their investment or otherwise become suspicious of the company that they are dealing with. Often by this point it is too late as the company has become uncontactable, changed its name and is now targeting new victims elsewhere.
In some cases boiler rooms will provide their victims details to other operations who then do what is known as a recovery room scam. In this scenario the victim is contacted by a person claiming to represent a law enforcement agency or another company that is looking to return the stolen proceeds to victims. The caller will then ask for a sum of money to be wired to their bank account to cover an unfreezing or escrow fee. If the victim pays they will again be left out of pocket as the operation becomes uncontactable.
Trustees of SMSFs should be very careful when considering investments presented via a telephone or e-mail offer. If you not sure get advice.