June 16, 2009 Comments (0) Blog, Securities Fraud

How to stop a broker from cold-calling?

Cold-Calling
(Last Updated On: April 10, 2017)

Stop the Cold Calling

High-pressure sales calls (sometimes referred to as cold-calling) have been occurring in the securities industry for years. These calls occur when an investor receives unsolicited or unwanted phone calls-using high-pressure, persistent tactics-soliciting the purchase of securities. This is most frequently found with low-priced, speculative securities, but can often be as simple as a request to review your investment portfolio.

Here are some ways to detect whether the call you received was “cold-calling:”

· Broker pressures investor to invest quickly to avoid missing out on a “once in a lifetime opportunity”, indicates that the offer is “good today only,” or makes claims that seem too good to be true.

· Investor receives frequent phone calls. Caller is badgering, insulting, or claims to be an expert (has “inside information,” etc.)

· Investor is subjected to the three-call system – (1) investor receives an introductory call; (2) broker calls again to touch base and to develop a comfort level with the investor; (3) call is a sales pitch or an enticement to buy.

· Investor may be asked to sell a listed or more well-known security for an obscure, broker-recommended product.

Things to know

Here are things you should know if you want the broker to stop calling you or if you are worried that the cold-caller is pitching you an investment scam:

· NASD’s Telemarketing Rule (NASD Rule 2211) limits the calling time to between 8 a.m. and 9 p.m. Also, financial advisors calling must identify themselves by providing their name, firm name, address, or phone number. If you do not want such calls, ask the caller to place you on the firm’s “do-not-call” list. If the broker fails to provide you with his name, firm name, address, or phone number, you can refer him to Rule 2211.

· Beware of sales pitches that make exaggerated claims about the expected profitability of a particular investment, or make specific price predictions, such as, “your money will double in six months.” If it sounds too good to be true, it usually is.

· Never send money to a firm or broker that you are hearing from for the first time simply based on a telephone sales pitch. If you do so, be prepared to accept the risk of losing the entire investment.

· Find out about the broker’s background via FINRA BrokerCheck or by calling the FINRA BrokerCheck Hotline (800) 289-9999. Call the state securities office and Better Business Bureau.

· Meet with your broker and visit the firm, if possible. Investments are major financial undertakings and should be afforded the same degree of investigation and caution as any other major purchase you might make.

· When opening a new account, read the New Account Agreement carefully for all the terms and conditions, especially margin and credit terms. Fully understand what you are agreeing to.

· Ask for and review written material before buying.

· Make sure the broker knows and understands your financial profile and life circumstances.

· Check confirmations and account statements carefully. Look for evidence of unwanted credit or margin use.

· Take immediate action if you detect a problem. Time is critical. Contact the firm’s branch manager. And, send a telegram, or registered or overnight letter to the compliance department of the firm refusing the purchase. Also, follow up with a phone call to the firm’s compliance department.

If you want more information on cold-calling, please visit http://www.finra.org/Investors/ProtectYourself/BeforeYouInvest/AvoidCommonInvestorProblems/index.htm.

Cold-calling with promises of guaranteed results are often investment scams.

Provided by The White Law Group

If you have questions about an investment that you were cold-called about or believe that you are the victim of securities fraud, The White Law Group can help. To speak to a securities attorney, please call our Chicago Office at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investors protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.

To learn more about The White Law Group, visit http://www.whitesecuritieslaw.com.

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