A reader wants to know how he can stop shady-sounding brokers and fundraisers from contacting him at home. Doctors are often targeted by this kind of fraud, because they are entrepreneurial, self-reliant, and -- most important -- affluent.
Q: “How can stop shady-sounding salesmen and fundraisers from calling me at home?”
A: Since the introduction of the federal government’s Do Not Call Registry, cold-calling to sell dubious investment schemes has been on the decline. But the hucksters are still out there and, as a doctor, you’re right in their crosshairs.
According to bucket shop pros, the ideal candidate for a shady sales pitch is entrepreneurial, self-reliant, and affluent, but still somewhat naive about investing. Many doctors fit this picture to a “T.”
When you receive a call from a person you don't know who's offering you a hot investment prospect, you know you should hang up. But crooked brokers count on your being polite, which gives them a chance to work on you. The scammer may ask to be your broker just for a month to show you what he or she can do.
To establish the relationship, the first sale may be for 100 shares in a relatively well-known stock. On the second sales call, the broker will usually push a small-cap or micro-cap stock that the brokerage has bought for pennies per share, to be sold to gullible investors at inflated prices. This is where the broker is going to ask you to buy big -- 50,000 or 100,000 shares of whatever stock the brokerage is pushing. That’s the time to head for the exit.
The easiest way to defend yourself against cold callers is to sign up for the Do Not Call Registry. Once you’re on the list, your registration will never expire. If you’re on the list and you get a cold call, ask for the name of the brokerage and then remind the caller that the firm can be fined up to $16,000 per phone call. If you continue to receive phone calls from the organization or individual, you can file complaint here.
If you choose not to add your number to the Do Not Call Registry, tell the cold caller that you want your name and number removed from the calling list and then immediately hang up the phone. By law, companies are not allowed to contact you again once you’ve asked to have your name removed from the calling list.
Cold calls from people claiming to represent charitable organizations are far more common -- and the scammers are harder to spot. Sometimes, the con artist will claim you’ve already made a donation to the cause to convince you to trust the organization is trustworthy -- and to get you to “donate” again. Fundraisers who make you feel uncomfortable or who try to pressure you into making an immediate donation are another big red flag.
If a person calls claiming to be raising funds for a charity, you can check to see if the charity is legitimate at the Better Business Bureau’s Wise Giving Alliance or at the charity evaluation website Charity Navigator. The Federal Trade Commission also has some additional tips to help you determine whether a charity is on the up and up, and steps to take to protect you from fraud.