The Financial Services and Markets Authority (FSMA) of Belgium has issued another public warning, this time against the unauthorized activities of ‘boiler rooms’ that are contacting Belgian consumers. The latest warning details a list of six companies that are currently not authorized investment firms or credit institutions in Belgium, and are prohibited from offering investment services in or from the country.
A large number of unregulated entities have recently been classified as boiler room scams, defined as any type of fraud that involves the contacting of customers in an unsolicited manner or medium, most commonly by telephone, making offers on rather obscure shares or exotic financial products.
Compounding this issue for potential market participants is the claim that boiler rooms commonly make out that they are authorized service providers, complete with a professional website and forms to fill out – it should be noted that these entities are in no way authorized to deal such products or solicit these transactions or trades.
The following 6 firms are potentially classified as boiler rooms operating unlawfully in Belgium:
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- Charles van Deursen
- CTI China Renaissance (CTICR)/XW Technology Hong Kong Limited
- Toronto Sumitomo Trading International (TST International)
- Toshikatsu Group
- TST International
- Woori Bridgewater Brokerage
The latest announcement follows on the heels of a previous warning that was issued back in April, detailing additional predatory entities in Belgium, on that occasion seven boiler rooms and ‘recovery rooms’.
These warnings are part of the FSMA’s routine efforts to inform the public of unauthorized activities in order to shield domestic clients. European regulators have taken a more aggressive stance against scams in recent years with sustained efforts to inform and educate the public against unauthorized foreign exchange (FX) and contracts-for-difference (CFDs) providers, among
The FSMA serves a very important role in the country, helping bring to light a number of schemes and predatory organizations that conspire against traders and market participants in the country. The FSMA also advises against deposits and the transfer of money to these entities, given the inherent risk involved.
How to Avoid Falling for a Boiler Room Scam
In addition to a routine warning service published by the FMSA, the regulatory authority has outlined a number of protective measures for market participants to help mitigate the risk of being victimized by unauthorized service providers and boiler room scams. Investors are urged to verify the identity of any organization contacting them, as well as checking and staying up to date with the FSMA warnings.
It is also important to note whether the investment firm holds authorization to offer financial services and can contact the FSMA in the case of any queries. Finally, any offers of unrealistic returns or transfer of funds to a country with no connection with the financial group should serve as a red flag and ultimately be avoided.