Look out for the following signs to avoid becoming a victim of cold call investment scammers
A little bit of common sense and perhaps some research will protect you from most scammers. These are the tell-tale signs to look out for:
1 You've never heard of the firm. Legitimate UK investment companies are not allowed to cold call. Ignore nonsenses such as "we talked last November".
2 There's a call centre "buzz". The call may use low quality, cheap lines.
3 They will use your first name – but in the way it appears on share registers or other lists (so Bill becomes William).
4 They will ask how your investments are doing – answers don't matter.
5 You will be told bank savings earn little. Then they will say they have been "given the green light to release the investment" to "selected investors".
6 They will ask you what you do for a living – answers do not matter but help the salesman (almost invariably male) to break down resistance.
7 There is almost always "Chinese demand" whether it is wine ("they are so rich they mix the best clarets with Pepsi") rare earth elements, or gold.
8 You will be asked how much you can "start with", so "we can get to know each other better and build up trust".
9 You will be told that the salesman earns 1% commission. That's not true.
10 You will often be told that the investment is so good the seller has invested money in it for his granny/parents/children. Again, not true.
11 You will be switched from"junior" to "senior" broker. The titles are interchangeable.
12 You will be asked if you understand the investment (most victims don't want to admit ignorance) and if you are happy to go ahead.
13 They promise to post or email details. They don't … that way they can follow up asking if you have received them. This reinforces the message.
14 They will contact you again even if you have told them you are not interested. This will point out how much you have missed by the delay.
If you want to find out more about the legitimacy of a financial investment, take these four steps:
• Check the company on the internet. Many will have authentic-looking sites, but delve deeper. Does it give a UK address? Put it into Google Streetview – often you'll find it's just a maildrop. Look for other businesses which are at the same address. Look for the names of individuals connected to the company, then Google them.
• Check the company's credentials in Companies House (companieshouse.gov.uk). It offers a free WebCheck service, plus fees starting at £1 to retrieve documents about a company.
• Check the FCA Register at fca.org.uk/register. It lists financial services firms and individuals in the UK that are authorised by the FCA to do business, registered to undertake regulated activities and approved to provide products or services. If you are cold called by a financial services firm, always ring back on the switchboard number given on the Register.
• Check the FCA's list of unauthorised firms. It is not exhaustive, but it is updated regularly at fca.org.uk. It also contains a list of companies that worry foreign regulators, too.
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