Many securities firms telephone investors they do not know to sell stocks and other
investments. These "cold calls" can serve as a legitimate way of
reaching new customers, but they can also lead to trouble. Dishonest brokers
may pressure you to buy a bad investment or a scam. Whether the calls are
annoying, abusive, or downright crooked, you can stop cold callers. The
law protects you by requiring cold callers to follow several rules:
- Cold callers may only call you at home between 8:00 a.m. and
9:00 p.m. These time restrictions do not apply if you are already a customer
of the firm or you've given the firm permission to call you at other times. Cold
callers may call you at work at any time.
- Cold callers must say who's calling and why. Cold callers must
promptly tell you their name, their firm's name, address or telephone number
and that the purpose of the call is to sell you an investment.
- Cold callers must put you on their "Do Not Call" list,
if you ask. Every securities firm must keep a “Do Not Call” list. If you want
to stop sales calls from that firm, tell the caller to put your name and
telephone number on the firm's “Do Not Call” list. If anyone from that firm
calls you again, get the caller's name and telephone number, note the date and
time of the call, and complain to the firm's compliance officer, the SEC, and
your state's securities regulator.
- Cold Caller must avoid calls to you if you are on the National “Do
Not Call” Registry managed by the Federal Trade Commission. If you want to
sign up, go to https://www.donotcall.gov/. Cold
callers cannot call you if you are on this registry, unless you are already a
customer, you previously gave written permission, or the caller is a family
member, friend, or acquaintance. However, even if any of those exceptions
applies, you can still stop calls by asking the caller to put your name and
telephone number on the firm’s “Do Not Call” list. The FTC also accepts online complaints
about unwanted calls from those on the National “Do Not Call” registry.
- Cold callers must get your written approval before taking money directly
from your bank accounts. Before investing, you should always get answers to
your questions and written information about the investment. If you decide to
buy from a cold caller, do not give your checking or savings account numbers to
the broker over the phone. Brokers must get your written permission - such as
your signature on a check or an authorization form - before they can take money
from your checking or savings account.
- Cold callers must tell you the truth. People selling securities
must tell you the truth. Brokers who lie to you about any important aspect of
an investment opportunity violate federal and state securities laws.
If a cold caller violates any of these rules, you can complain to the firm's
compliance officer and the Financial
Industry Regulatory Authority (FINRA). If a cold caller uses
harassing, abusive sales tactics or lies to you about an investment, you should
contact the SEC or the North
American Securities Administrators Association to
find your state's securities regulator.
For additional information about how to recognize cold calling, see our publication