Thursday, 14 May 2015
Financial Conduct Authority on Cold Calls: hang up chances it's a scam
Excellent and unequivocal advice from the UK's Financial Conduct Authority (FCA) on Cold Calls: 'the safest thing to do is to hang up'.
'If you have been cold colded about an investment opportunity, the chances are it's very risky or a scam.'
Sadly advice that thousands of people who who fallen for investment scams will now wish they had heeded.
The advice is similiar in Japan from the their Financial Services Agency:
"Cold Calling" - Investors Alert
1.
Today, so-called "Cold Calling," a fraudulent practice aimed
at soliciting investors, is conducted all over the world.
"Cold-calling" is a practice where by an entity disguises itself as a
brokerage firm or an asset management firm and approaches potential investors
via non face-to-face channels, such as by phone, fax, and emails, in order to
solicit investment in securities or financial products. Typically, a "cold
caller" makes unsolicited calls to potential investors, cajoles them into
deciding to purchase certain securities, and then, becomes unavailable for
contact after the investor sends the money for that purchase. As a result, the
investors cannot obtain the securities although they made the payment, and they
also cannot get back the money they paid. Investors need to be more careful and
vigilant, as cold callers have been using more varied and more sophisticated
tactics. (For example, some cold callers execute transactions properly and make
profits for investors at first. Then, they solicit bigger transaction and make
the investors transfer the money for it. After that, the cold callers
disappear.)
2.
In most countries, a person is required to be registered with or
licensed by the national regulatory body before conducting solicitation of
securities transactions. However, cold-callers do not have such registration or
licenses. One of the characteristics of cold callers is that it is extremely
difficult to discover their whereabouts. Many cold callers indicate their
office locations on their websites (or documents sent to investors), but they
rarely operate at that location. Apparently, cold callers intentionally hide
their whereabouts, so that they can avoid being visited by the investors they
approach. Notably, it is very typical that cold callers claim that they are
located in a country that is different from the location of the prospective
victim. For example, there are many cases in which cold callers that have
approached American or European investors claims that to have an office located
in Japan (at a building in Tokyo, for instance.)
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