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FSC warns public about cold calls

29 Oct 02

The Financial Services Commission has received a number of reports from Gibraltar residents that they have recently received unsolicited telephone calls (seemingly from persons outside Gibraltar) in which they are offered shares, usually in US companies.

The public is reminded that they should not respond to such offers unless and until they have checked whether the person trying to interest them in shares, or any investments, represents a reputable investment firm that is suitably authorised. They should always ask for details about the firm, and then make their own enquiries about it. They should not rely on websites controlled by the firm itself, as there is little policing of what appears on the Internet.

A salesperson should be willing to say where his or her company is authorised. Regulators in most jurisdictions give details of the companies they have authorised on their websites, or they will be willing to provide this information over the telephone. If a caller is unwilling to give relevant information on request, he/she should be treated with suspicion.

A caller may use "hard sell" tactics, such as claiming that a special opportunity will be lost if a purchase is not made immediately. Or he/she may promise high returns to get the consumer to invest in a particular product, or buy shares. The customer may later find out that the product does not exist, or that the particular shares are practically worthless.

Such "hard selling" is not practised by reputable firms. Investors should be wary of a deal that sounds too good to be true - it usually will be!

Notes for Editors:

1. Any persons carrying on financial services business in or from within Gibraltar must be authorised by the Commission to do so. Investment business is subject to the requirements of the Financial Services Acts 1989 and 1998. The latter Act implements the EU Investment Services Directive. It is an offence for any person to hold himself out as offering investment services if he does not have the necessary authorisation or licence.

2. The Commission publishes lists of authorised, or licensed firms or institutions on its website under "Regulated Entities". The lists are updated monthly.