Overseas Call Centers Bombard People They Target for Fraud

Last year, the Securities and Exchange Commission sued an online entertainment and streaming company called Vuuzle and its founder, Ronald Flynn, for orchestrating a $14 million fraudulent stock scheme. Flynn, an American citizen, is charged with running a boiler room operation. His workers were mostly in the Philippines; he monitored his sales employees for their English pronunciation, according to court filings.

Technology has made boiler room sales easier in other ways. “Now they’re armed with additional information before they make the call,” Borg says. As noted, they can mine the dark web, the internet or social media for nearly anything there is to know about a person. Crooks can precisely target their desired demographic, placing ads on social media visible only to those who they think are vulnerable to their scam, picking their age range, political views or location. Just like any company that does online advertising, they know who clicked on what link, what they are passionate about. They find customers who are already primed for their pitches.

And that pitch can come at any time. “We’ve moved to an age where we have emails, and that allows you to drop a fraud request into somebody’s inbox from anywhere in the world, 24/7,” says Greg Ruppert, executive vice president of the Financial Industry Regulatory Authority (FINRA). Thanks to cellphones, scammers can reach you any place at almost any time. “The access that criminals now have to you in terms of time is pretty much unlimited.”

When a boiler room crook actually gets through to a potential customer, that employee usually reads from a script prepared by his or her superiors. It can be very detailed, or it can be more of a set of talking points. The scripts might include quotes about the stock markets or politics from legitimate news sources, although often taken out of context.

“Usually, they would change the script about every week or two, because there were always new headlines,” says the former​ Metals.com scammer.

The more sophisticated operations have two tiers of salespeople: the “openers,” or “fronters,” and the “closers.” The opener will make the initial call; once a potential client is hooked and the opener has established that he or she is good for the money, the client is transferred to the closer, someone with more experience who conveys a sense of authority.

Openers are usually plucked straight out of college or from a different sales background. In the past, they would be recruited through newspaper job ads; now it’s through mainstream online job boards. “You just hire them to read scripts and handle telephone calls,” says Steve Baker, investigator at the Better Business Bureau and former official at the Federal Trade Commission. They might not even know what the scam is. “[The higher-ups] keep them isolated from the operations part of it,” Baker adds.

In contrast, closers know the ins and outs of the business and often strike out on their own. “Senior managers or shift supervisors will leave and set up identical scams,” Baker says.

The scammers work on commission, so they have the incentive to work around the clock. And they are good at what they do. “People say, ‘If it sounds too good to be true, it probably is.’ That’s really good advice. Except that if it sounds too good to be true, you are probably dealing with an amateur,” says Gerri Walsh, FINRA’s senior vice president of investor education. “He really doesn’t know the tricks of the trade. And the tricks of the trade are to use persuasion, to use emotion.”

At Metals.com, the morning meetings had loud music and rousing speeches to hype up the “sales force” before the workday. The payoff was dangled in front of their eyes. “You would literally have to park your Honda Civic, your Kia, your Toyota next to their Rolls-Royces, their Ferraris,” says the former salesperson. “It was the most money-driven group of people I’ve ever been around.”