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Monday, April 02, 2007

Big money. Big balls. Big scam.

Every guiri with enough notches on the wall of their overpriced cell room* has experienced the boiler room.

Boiler rooms are basically sketchy telemarketing companies which sell stocks for dubious companies. For this explanation we’ll call the dubious company Company X. The boiler room says Company X is - according to “insider information” - going to go big and bring in vast sums of money to the lucky few who know about it beforehand.

Company X is usually an associate of the boiler room operators, and the idea is to inflate the price of its worthless stock so that Company X’s owners will have enough volume to sell their shares. The people who invested money with the boiler room operators are then left with a valueless stock. Company X and their boiler room associates fly off, so to speak, as a pack of vultures does after feasting on carrion.

Boiler rooms "cold call", that is, they compile lists of people with investing powers, together with their phone numbers, and call them and pitch their stocks to them. They pitch the positive side of Company X’s stock and exaggerate its money-making prospects. A typical pitch would be that Company X is a pharmaceutical firm that has a breakthrough drug which is about to go public. Shortly Company X’s stocks are going to go through the roof, so anyone investing with Company X is going to make massive profits.

The telemarketers, if they are good at their job, know how to tap into their client’s greed; they also know that these clients have surplus money they would like to see grow. So they sell the stock using high-pressure techniques, using sham terminology and overly positive predictions. The terminology and the predictions, as well as the replies to skeptical questions are all scripted and practiced beforehand.

The question is, is this illegal if they’re selling real stocks? Not really is the answer. It depends on where you are, because in some countries there are few prohibitions against insider trading. That’s why these operations work out of places like south east Asia and Spain.

I’ve seen quite a few ads recruiting for these shady telemarketing companies. Just do a daily search on sites like Craigslist and Loquo. Check these ads out, which I found today: here, here, here, here and here.

These were only the sketchiest looking ones. There are many more which are probably masquerading as serious companies, with actual domain names, but with the same pitch as the ads above. My favorites are the Barcelona Connect ads, with descriptions like:

“Are you a legend, or a legend in the making?”

“Big money. You want it, we’ve got it. All you need are big balls …”

They were much more abundant a few years ago, but as you can see they still operate around town. In Barcelona, due to its proximity to the UK, these scams are mostly run by Brits who take advantage of the legal loophole and the large potential workforce.

There is ripe labor force of desperate English-speaking guiris who will work as telemarketers. They will sell total crap - and knowingly do so - in order to pay the rent. So the shady “businessmen” come to places like Barcelona, open up their offices, and start their operations. There’s nothing remotely interesting or engaging about the job, besides the thrill of outwitting some rich sucker on the other end of a phone line and raking in a few thousand euros in profit. It’s all about greed and status – for the few who are the brains of the operation (Company X and their boiler room operators). The callers - that’s you guiri - working for the boiler room operators will not make much more than subsistence wages. They stay on with the promise of huge commissions in the near future. The reality is that in the near future the boiler room operators will disappear once they’ve “pumped and dumped” their stock.

Adios big commissions. You’ve just been scammed while scamming for someone else.


I’ve been so desperate for calés that I’ve waited for hours in Cash Converters to make a measly twenty euros for a dozen or so DVDs. A couple times I even answered those telemarketing ads. The idea of selling anything at all on a telephone was repulsive to me because one, I have a hard time getting enthusiastic about anything I don’t truly believe in, and two, because being on the telephone all day, in an office full of aggressive salesmen, is about as appealing to me as running an Epilady over my testicles.

My first encounter with these guys was about 5 years ago when I answered an ad I saw on Barcelona Connect. I called and was told to come down to their office that same day (it was downtown, just off Plaça Urquinaona). I hadn’t been working steadily for months at that time, and I decided to bite it and work as a telemarketing wage slave. I didn’t know it was a scam at the time; I was simply looking for a steady job other than teaching English.

The office - if I remember correctly - was on the second floor, just above a beauty college. You entered, and the immediate sensation was one of impermanence. The central room, where all the callers sat in a kind of big rectangle, was a slap dash affair of folding tables, criss-crossed wires and people pattering into telephones. With skill and practice, the entire office could be dismounted and moved in less than fifteen minutes.

I had an interview with an English guy who sported a Beckham-esque faux hawk and designer clothing. He pitched me the kind of job where - if I was good enough - I could make enough commissions to pull in six figures a year. Millions in a couple years. He had me sit with a guy from Australia who was cold calling, and who, if he hooked a potential client, would pass the client on to one of the higher ups (in this case the pseudo-Beckham who interviewed me). I listened in, saw the list that he pulled the names from, and went back to the English guy and told him I wasn’t interested. He asked me why, and I told him it was because it was against my principles to work with anyone who had a faux hawk - and that anyway the faux hawk was about to go out of style with the next economy flight of drunken hooligans landing in El Prat.

I left and became a roadie after that. After some desultory months - in which I roadied for the likes of Metallica and the Stones, and, the most satanic of all, Operación Triunfo - I become a virtual pimp for a porn site.

But being roadie and a virtual pimp don’t pay much. So, about a year ago I saw another ad, promising much of the same: gargantuan commissions for motivated and talented young English-speaking people. The same thing, selling “stocks”, and, of course, “no financial advisory experience or education” was required. What a scam I thought. Nevertheless, I immediately sent them an email, and a couple days later I got a telephone call.

The guy on the other end had an Irish accent, and he asked me a few things, like where I was from, was a I married, what I did exactly. He said he wanted to meet me for an interview and named a hotel downtown. The next day I went to the hotel and found the guy sitting in the lobby. He went over the enormous money potential involved in the job, and why I was a potential candidate. I was “relatively stable”, “older” than most of the candidates they had chosen in the past, and this made me attractive to them.

The yarn he spun was this: they had hired hotshot kids in the past who made astronomical amounts of money in just a few months, and who blew everything on putas and coke and exotic cars. Obviously, this was part of the ruse, to hook into my greed and make me think I could outsmart them. I was supposed to think that I was going to make tons of money in a few months, and would leave the job with massive savings, which I could put towards anything I liked. If I remember correctly, the pay came to seven or eight hundred euros a month, which is the absolute minimum anyone here can survive on. This, supposedly, would be augmented by massive commissions if you had the brains and the tenacity of “true sales demon”. He asked me, “Do YOU have what it takes?”

For a second testosterone-fueled fantasies of strippers and mountains of cocaine worthy of Tony Montana flitted through my brain …

The guy, who didn’t seem at all like a bad guy (in fact, he would have made a great Irish gangster for a Cohen brothers movie) paid for my coffee and told me his employer would call me within the net few days. He said it was to be the second interview, before actually going to the office for the third and final in-person interview. During this second telephone interview I was to “sell something”. He said this “something” would be at random, like an object in the room, and that this would be a test of my sales abilities.

The Irish guy, called me from a blocked number, by the way. The guy who called me next - let’s call him Gareth - also called from a blocked number. The emails they provided in their ads – and if you do a cursory check on this you will also find the same thing – were always hotmail or yahoo.uk accounts. (I've noticed that the ads are now providing phone numbers, some even have domains. This, of course, doesn't mean they are legitimate. They can just as easily buy an untraceable cell phone for this, and domains are easy to buy anonymously)

So Gareth called me, but by that time I had already decided I would rather sell roses or pirate DVDs on the Ramblas than work for some British scam artists in a boiler room. I’d spoken to some people about the telemarketing scene and they invariably told me the same thing. No one EVER sees a penny of those supposed commissions. They sell stocks or whatever (I’ve heard of scams involving fake homeopathic medicines), rip people off on the margins of the law, and adios, they’re off to some other faraway place with another large guiri community to set up another boiler room.

I took “Gareth’s” call anyway, just for the hell of it. His pitch was almost the same as the Irish guy’s, but more forceful, and definitely more studied. It basically went like this. I’ll be Mike for the sake of this conversation, but you could easily fill in your own name:

“… MIKE, you need to know that I am completely serious about this. I am not going waste your time. This is a chance to make upwards of six figures a year if you are skilled and dedicated enough. MIKE, DOES THAT INTEREST YOU? “

“Oh yeah, it does.”

“MIKE this is a SERIOUS offer. You start working with this firm and within three months you will be making over 20,000 thousand euros month. Within a year you will be making MORE MONEY THAN YOU EVER DREAMED OF! MIKE, do you want to make money and be SUCCESSFUL?”

“Oh YEAH!”

“The reason we are talking to you is …”

At this point he went into the same story as the Irish guy, about the hotshot Brit kids who came over here and who were making so much money they didn’t know what to do with it. They were buying powerful sports cars, spending everything they had on blow and prostitutes, and within a few months they were completely burned out. He really emphasized the point about women and drugs. Robert continued:

“Now MIKE …”

He, like the other guy, had this really annoying habit of repeating my name over and over again - an obvious sales tactic conceived to subtly manipulate me into thinking I was getting personal treatment. Words like success, money, women, cars … etc. next to my name were supposed to make me start believing that my interests were his interests.

“The other day I took my YACHT, with my wife and kids, to Menorca. In three years, MIKE, I’ve made a fortune which for most people takes a lifetime to achieve. MIKE does that sounds interesting?”

“Oh hell yeah, GARETH!!!!”

“Now I don’t want some STONED IDIOT who comes in and isn’t motivated. This isn’t a job for people interested in steady hours, or for people who ask how much vacation time they’ll get. This is for people who are motivated. MIKE, in a few year time you too can have a yacht in Masnou. You too can have a Maserati. Does being wealthy sound desirable to you MIKE?”

The same annoying rant went on for a few more minutes. He told me I was the perfect candidate because I had no training to be broker, therefore I could be trained by the company and not bring in any bad habits. My C.V. actually, was not tailored for their job advert at all. I just sent it to them out of sheer boredom one day while concocting money-making schemes. The fact that this guy wanted me to work as a broker for his firm was a dead give away that it was a complete scam. Here I was, obviously the stoned idiot he was ranting about, being pitched a job offer to make millions of euros in a few months.

I never actually had to “sell anything” to Gareth during that second interview. Gareth promised to call me in the next few days to arrange yet another interview, but by that time I had landed another job. Every time I saw a blocked number calling me on my cell, I ignored it. After about a week the freak stopped calling.


Interestingly, my friend Kovaks, the guiri detective, has been contacted about a similar incident. Some guy was getting threatening phone calls and emails from some boiler room scammers because of some comments he made on a blog.


* i.e. rented room