Definition of boiler room
1 : a room in which a boiler is located
2 : a room equipped with telephones used for making high-pressure usually fraudulent sales pitches
First Known Use of boiler room
Financial Definition of BOILER ROOM
What It Is
How It Works
The term came about as a result of the high pressure sales environment it creates. Most salespeople in these environments work solely on commission and many of the investment opportunities are less-than-legitimate.
The salesperson may use fake reports or documents to support claims of profits or legitimacy. During the sales call, aggressive tactics are used to intimidate and entice naïve and non-investment-savvy consumers to partake in an investment scam that may have little, if any, true value. The salespeople try to entice potential investors by promising or hinting at huge returns on their investment.
Why It Matters
If not illegal, the sales tactics that are used in boiler rooms do not conform to government regulations or fair market rules. Boiler room salespeople maximize their income by conveying one-sided, or even false, information in order to persuade as many customers as possible to invest as quickly as possible.
BOILER ROOM Defined for English Language Learners
Definition of boiler room for English Language Learners
: a room with equipment for heating a building or ship : a room in which a boiler is located
: a room with many telephones that are used by people who call strangers and use dishonest or forceful methods to try to sell them something
Legal Definition of boiler room
: a room equipped with telephones used for making high-pressure usually fraudulent sales pitches
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