Reported by: KELLY PHILLIPS ERB

Have you ever been on the receiving end of an aggressive sales call?

Each year, thousands of people fall victim to so-called boiler room schemes. The US Securities and Exchange Commission defines boiler room schemes as large-scale operations designed to lure in as many people into an investment scam as possible, often using high-pressure sales tactics. They typically do this by cold-calling or soliciting through emails, text messages, and social media, often flouting SEC regulations.

So, how can taxpayers protect themselves?

• Slow down. The SEC advises you to resist the pressure to invest quickly. Take the time to investigate thoroughly before sending money or signing any agreements.
• Be wary. It’s essential to do your homework, but IRS-CI says not to take a website at face value. A web address shouldn’t be the only evidence of the existence of a legitimate investment company. Remember, fraudsters can easily create investment company websites or purport to be from actual investment companies that don’t have websites. 
• Double-check employment information.Just because a cold-caller may use the names of legitimate brokers listed online doesn’t mean they are affiliated with those brokers. According to the SEC, you can check out the background of anyone selling or offering an investment using the free search tool on Investor.gov.
• Don’t give out personal information—especially online. Fraudsters use that information to target potential victims and are trained to draw victims in and keep them engaged. The more information they know about you and your assets, the more likely they will trick you into making a fraudulent investment.
• Don’t stay on the line. If you receive a cold call with an investment offer that sounds too good to be true, hang up. It can be easy for fraudsters to manipulate those who may feel it’s impolite not to engage. It’s not. And that’s the thread they cling to—typically, the longer a potential victim stays on the line, the more likely there’s a sale.
• Don’t make a bad situation worse. If you lose money to one of these schemes, do not pay a fee or tax to the fraudsters to withdraw your money or reverse the transaction. You won’t get your money back, and you’ll likely become a victim again.
• Help others by reporting fraud to law enforcement. All too often, victims of fraud are scared to come forward because they’re embarrassed. Don’t be. The schemers did the wrong thing, not you. But you can help keep others from becoming victims by alerting law enforcement—use Form 3949-A to report suspected fraud to IRS.

Read full report: https://news.bloomberglaw.com/tax-insights-and-commentary/irs-warns-on-boiler-room-schemes-during-fraud-awareness-week