September 8, 2011 Comments (0) Blog, Securities Fraud

The SEC Urges Investors to Know Their Rights with regards to Investment Cold Calls

Investment Cold Calls
(Last Updated On: April 10, 2017)

Investors Know Your Rights

The SEC recently posted a public service announcement alert for investors about Investment Cold Calls from financial professionals or scam artists selling investment products over the telephone.

As a securities arbitration and investor protection law firm it is common for us to hear from clients who have been the victim of a scam perpetrated over the telephone or have been pressured into investments that may carry significant risk by a broker-dealer calling them without a previous relationship. Here are a few points from the SEC alert that the firm feels are particularly significant.

What should you know if you don’t want to be called?

Use the National Do Not Call Registry. Cold callers of all types, including those selling securities, are required to check the National Do Not Call Registry before calling someone. If you receive cold calls while on the list, those calling you are in violation of government regulations. You can get on the list by visiting donotcall.gov or by calling 1-888-382-1222 from the number that you want to add to the list.

Know your rights when receiving cold calls and buying securities over the phone.

– Cold callers are not permitted to phone anyone outside of the hours of 8am to 9pm, if they call outsider of these hours they are in violation of regulations

– Cold callers must identify themselves promptly and clearly and also must provide telephone companies with caller ID information. If they do not provide this information they are operating outside regulations and it may be a red flag.

– If you no longer want to hear from a particular telemarketer, they must put you on their individual “do-not-call” list if you ask them.

– If you choose to buy a security from someone over the telephone, they must get you written permission before they can use money from your accounts to pay for investment products. Providing only bank transfer information without a signed check or authorization form is in violation of regulations.

Red flags for telemarketing calls about securities products according to the SEC.

– “High-pressure sales tactics.” If you are feeling like you are being pushed at your every response and are not having a conversation, but are being hard-sold, this may be a concern.

– “Pitches that stress once-in-a-lifetime opportunities.” Often investment opportunities that sound too good to be true are, especially if the caller claims to base this on inside or confidential information (which is against regulations).

– “Callers touting companies with breakthrough technologies.” According to the SEC, “These technologies play off of legitimate technologies, but at the same time sound just a little too good to be true.”

– “Callers who refuse to send you written information about the investment.” This may be a red-flag and a way to pressure you into a quick decision.

– “Calls from unregistered and unsupervised salespersons.” As with all securities purchases, it is good practice to check out the broker-dealer you are buying from. You can do this with the broker check function on FINRA.org and it is free. If a broker is not registered, this may be a red-flag.

Other important tid-bits from the SEC.

– Be proactive with cold callers. Report “abusive cold-callers” to the SEC, FINRA, FTC or state securities regulators, this may help protect others from being hassled or taken advantage of. Be sure to tell cold-callers that are rude or intrusive to not call again. Another tactic of cold-callers is to try to befriend you; it may not be advisable to develop a personal relationship with a telemarketer you don’t know.

– If you want to invest with a telemarketer, the SEC encourages you to do your homework. Check out the broker’s registration with FINRA or other agency. Do outside research before agreeing to the deal. Also, get a second opinion about the deal, preferably from a financial professional or attorney.

For the full cold call alert issued by the SEC you can read it here: http://www.sec.gov/investor/pubs/coldcall.htm

Recovery of Investment Losses

If you have lost money in an investment product you bought via a cold call from a telemarketer who you feel did not fulfill the obligations outlined in the SEC’s alert feel free to call our Chicago office at 888-637-5510 for a free consultation.

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

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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