boiler room

noun
Updated on: 26 Jul 2017

Definition of boiler room

  1. 1 :  a room in which a boiler is located

  2. 2 :  a room equipped with telephones used for making high-pressure usually fraudulent sales pitches

First Known Use of boiler room

1820


Financial Definition of BOILER ROOM

boiler room

What It Is

A boiler room is a call center in which salespeople call potential investors in an attempt to sell risky, or even falsified, investment opportunities using aggressive and unethical tactics.

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

boiler room

noun

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


Law Dictionary

boiler room

noun boil·er room

Legal Definition of boiler room

  1. :  a room equipped with telephones used for making high-pressure usually fraudulent sales pitches

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