Cold-Call Self-Defense
It’s dinnertime. You’re chomping on a mouthful of curried squid tarts when the phone rings. You swallow quickly and pick up the receiver. What good fortune! The person on the other end says you’re among the “lucky few” to be offered a “sure-fire investment.” He says, “Inside information virtually guarantees a 200% return within six months! Invest now!”
Sadly, many people are suckered into investing with such pitches. Your best bet is simply to hang up.
Herewith, we offer some tips in the hope that you’ll never become a cold-call victim.
First, realize that promises of high returns for low risk are likely to be broken. Warnings that you have to act now are also dubious. Any good investment should still be that tomorrow. Know that it’s illegal to pass on or act on inside information, so that phrase itself is a sign of trouble. Steer clear of anyone unwilling to provide details in writing. Beware of predictions or guarantees of profits, even if the cold-caller is part of Dionne Warwick’s network of psychics. If you’re told you’re among the “lucky few” being approached with this offer, imagine what the unlucky few are being offered -- beachfront property in Antarctica?
Don’t get excited if the cold-caller is trying to sell you shares of an initial public offering, or IPO. If the company’s prospects really had a lot of people excited, few individual investors would be able to get their hands on any shares. Most would be reserved for institutions and the well-connected wealthy. When there’s little interest in a company, its shares may end up being hawked over the phone.
If you’re annoyed by cold calls, ask the caller to put you on his firm’s “do not call” list. You can also prevent some of your “lucky few” brethren from being conned by reporting these hypesters. Take notes during the call and report anything you think might be illegal to the Securities and Exchange Commission at (202) 942-7040. Or just ask for the caller’s home number, ask when he eats dinner, and tell him you’ll call him back.
