Cold-Calling: How To Spot an Investment Fraud

by Wall Street Fraud on February 3, 2012

Unsuitable investmentWhile the National Do Not Call Registry has certainly reduced the number of sales calls investors receive, cold-calling is still a commonly used practice among securities firms. Therefore, it is important to know how to spot a potential investment scam.

While legitimate callers ask questions to understand your financial situation and investment goals before recommending that you buy anything, cold-calling is also used by fraudsters who want to simply take your money.

As outlined by the Securities and Exchange Commission, investors should watch out for the following:

  • High-pressure sales tactics. Aggressive cold callers speak from persuasive scripts that include retorts for your every objection.  As long as you stay on the phone, they’ll keep trying to sell.  And they won’t let you get a word in edgewise.
  • Pitches that stress “once-in-a-lifetime” opportunities. Watch out for someone who tells you about a “once-in-a-lifetime” opportunity, especially when the caller bases the recommendation on “inside” or “confidential” information.
  • Callers touting companies with “breakthrough technologies.”  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 is a form of manipulation designed to force a quick decision.  You should be able to receive information about an investment and take as much time as you need to review it.
  • Calls from unregistered and unsupervised salespersons. Cold-calling “brokers” and their bosses may not be properly registered to sell securities—and often operate in an environment completely devoid of required supervisory procedures.  You can verify whether the caller is registered to sell securities by using FINRA BrokerCheck.

If you have been the victim of a cold-calling investment scam, we may be able to help you recover your losses. Contact us today at 215-839-3953 for a free consultation.

At Wall Street Fraud, we are dedicated to offering assistance to those who have been hurt by improper corporate or investment practices.

If you have been the victim of stock brokerage fraud, securities fraud, mutual fund fraud, stockbroker fraud, annuities fraud, or any other type of investment fraud, please contact us today for a free case evaluation. Our talented and aggressive legal and professional staff is eager to help you recover your losses.


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