The Con by James Munton & Jelita McLeod

Author:James Munton & Jelita McLeod [Munton, James & McLeod, Jelita]
Language: eng
Format: epub
Publisher: Rowman & Littlefield Publishing Group, Inc.
Published: 2011-08-14T16:00:00+00:00

Boiler Room Bunkum

One specialized form of telemarketing involves the sale of something far more grand than car warranties. In the case of boiler room scams, callers are selling a piece of the American dream—the chance to strike it rich.

Jess and Arvin are a solidly middle-class couple with two kids. Arvin works in upper management at a nationwide retailer; Jess is a university administrator. By mutual agreement, Jess handles household finances and Arvin the couple’s combined investments.

One day, Arvin took a call from a financial advisor named Sam. Before Arvin was able to hang up on him, Sam said, “I’m not selling anything. I just have something to tell you.” Sam gave Arvin the name of a publicly traded company and said that its stock price would rise the next day.

“I was intrigued enough to check,” said Arvin. “The next day, that particular stock had gone up.”

Sam called back. He still didn’t want anything, but he gave Arvin the name of a second company. That company’s stock also rose. By the third day, Arvin was more receptive to Sam’s calls.

“Imagine if you had money invested in those companies,” Sam told him. “You’d be a happy man.”

As Arvin remembered it, “He said he knew of another stock that was also guaranteed to rise. It was a pharmaceutical company and they were about to announce a breakthrough on Alzheimer’s disease, but I had to act quickly if I wanted to get in on the action. The shares were still below market value but were about to explode, based on this forthcoming announcement. He told me the company’s name. I looked it up. It was a legitimate company, listed on NASDAQ.”

Arvin asked a lot of questions, but Sam had an answer for everything. Arvin wanted to know why the share price hadn’t gone up already if the breakthrough was common knowledge. It wasn’t common knowledge, but Sam had been following the company’s research closely. Arvin asked why he was calling out of the blue. Sam said his background was in pharmaceutical sales and every once in a while he liked to challenge himself by making some cold calls. It helped to keep the job interesting. And it wasn’t entirely random; Sam was working from a list of people who met certain age, income, and geographic criteria.

“Sam kept emphasizing the importance of timing. If I wrote a check on the spot and sent it to him overnight, he could make sure the money was invested by lunchtime. How much did I want to put in? At this point I hadn’t agreed to invest a dime and I wasn’t sure I wanted to.”

Sam referred back to the first two tips he had given Arvin, saying if he chose to do nothing, he could sit back and watch while this new stock made millionaires of other people. Or he could be one of them.

“He was assertive, but all salespeople are. And although there was something appealing about it, I was hesitant, which is when he asked me if I had a 401(k).

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