Belgium's Financial Services and Markets Authority (FSMA) continues its vigilance of the industry with its latest warning against three companies seemingly operating as "boiler rooms".

FSMA Warns against Boiler Rooms

According to the regulatory warning today (Monday), IWL Consulting, May Capital Group, and South Pass Partners are not authorized to provide investment services in Belgium but are targeting Belgians with aggressive selling tactics.

"The FSMA, therefore, strongly advises against responding to any offer of financial services made by the companies listed above and against transferring money to any account number they might mention," the Belgian regulator stated.

Finance Magnates could not open one of the three blacklisted websites. However, the other two offer financial services advisory, and wealth management services, with one of them claiming to have 12,000 clients and $5 billion in assets under management (AUM). The other one claims to have a success ratio of 78 percent.

The Aggressive Sales Tactics of Boiler Rooms

Under boiler room scams, fraudsters unsolicitedly contact consumers, often by telephone, offering to sell them shares or other financial products, using aggressive and pushy sales tactics.

As the FSMA elaborated, these boiler rooms "claim to be authorized service providers, with a professional website and forms to fill out, [however] they are in reality fraudsters who offer fictitious or worthless products or services."

These criminals entice victims with limited initial investments that very soon appear to be profitable. However, the victims are then pushed to make further investments. "But when a consumer asks for his or her money back, this proves to be impossible without making additional payments and/or the new investments begin to lose money," the FSMA highlighted.

"The fraudsters often put the consumer under severe pressure (hence the term 'boiler room'), insisting that they keep making further payments. In the end, the consumer will never get the invested money back."

The latest warning by the FSMA is not the first against boiler rooms. The regulator also issued multiple similar public warnings against other firms operating boiler rooms and other financial services scams, too. Earlier this year, the US securities market regulator acted against a firm that used boiler room tactics to raise $35 million from over 300 investors.