The only way to put an end to these cold call scams

The FCA wants to protect us from losing our cash to cold-calling scammers. But the only way to do that is through a zeo-tolerance approach!

I have just had a top level discussion with one of the highest people at the Financial Conduct Authority (FCA).

It was all very secret – the location of our meeting was miles away from FCA headquarters on Canary Wharf. And it was to tell them what was wrong with the current approach to warning investors against telephone-based investment fraud – the boiler room operations whose slick, almost credible, sales patter steals a typical £10,000 to £15,000 a time from gullible savers. The very people whose activities I warn against on a regular basis in this blog.

I am cold-called by these firms several times each month. Sometimes, like buses, three or four come together on one day. I don't think this is deliberate, because there are so many mobs out there flogging anything from dodgy land to dodgy wine that being bashed like that in a few hours is probably just a coincidence.

I know what I am doing – getting as many details as possible of scams so I can report on them. But victims do not – and the criminals only need few to pay up each week to earn big money.

We aren't doing enough

These scams have reached epidemic proportions. They are easy, the pickings are great, and the chances of being caught - particularly before the stolen cash has been spent - are less than minimal. My complaint about the watchdog Financial Conduct Authority and the police is that there is no coherent policy to warn the vulnerable.

What is needed is a zero tolerance approach. Everyone needs to know that ALL investment calls are rip-offs. Let's avoid the niceties of whether this is cold-calling – to say someone made an enquiry several months before is a nonsense.

No legitimate investment company works in this way. The FCA rules forbid calls of this nature.

In common with many victims, my details came from a company share register; I own a small amount of equity in unexciting companies. And from there it is easy to find my phone number. Being ex-directory does not help. It is simple to get round that because phone numbers go on online or paper forms – often it is obligatory.

Failing that, find a corrupt employee at a phone company. Forget the Telephone Preference Service. It is either ignored or circumvented.

The FCA wants to protect private investors, who are even more tempted thanks to the current savings environment which guarantee losses in real terms. But its present approach depends on potential victims' awareness of its website. And this is unlikely because the seller takes control of the process, always assuming the victim will not check. Many are elderly and not computer-literate.

Even if they do, they have to look closely at the FCA home page before finding “scams”. Yes, it says you should check the register but it also admits that the register does not cover products such as wine, land, rare earth minerals and carbon credits. Yes, it describes some of these scams in detail, but does not even list wine, which is one of the longest running. And yes, there is a list of boiler room firms except that they come and go with such frequency, often changing their names, that it is always out of date.

A campaign for zero tolerance

My advice to the FCA is simple. It is a campaign for zero tolerance. It will say that ALL investment cold calls are BAD news. So slam the phone down on these calls because they are bound to be scams. There is not a single genuine instance of anyone making money from one of these calls other than the callers themselves.

The message must be “Do not engage. Otherwise you will lose your money. And that is guaranteed.”

This must be on prime time television, on huge bill boards, over every legitimate website, and on big press spaces. What is needed is a mindset changing campaign to make putting the phone down on these people as normal as locking your doors when you leave your home or putting on a seat belt in a car.

Investors who know about the warnings don't fall for the scams. It is the others that I worry about. And unless they are told in clear, easy to understand terms, without any ifs or buts, that engaging in any way with these people is ALWAYS a certain route to losing a serious money without any hope of recourse, then these investment rackets will continue.

Private Eye magazine called the FSA, the FCA's predecessor, the Fundamentally Supine Authority. It would be great if the FCA became the Fundamentally Courageous Authority.

It must call time on the cold callers.

More on scams:

'Winning' this award will leave you a loser

The oil scammer drilling for my money

Unmined gold: the aggressive scammers who won't take no for an answer

The tax-free coloured diamond investment scam

This fairytale is nothing but a scam

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