A cold call scam is a type of financial fraud involving swindlers contacting individuals or companies by phone, often claiming to be members of legitimate organizations such as banks, government agencies, or tech support ventures. 

They typically try to deceive the recipient into sharing valuable personal information like bank account details, passwords, or credit card numbers or purchasing a fake service or product. Such fraudulent practices prompted the U.K. authorities to propose a ban on cold calling.

In this article, we explain in detail how cold calling works, which are the common types of these schemes, dissecting each, how to recognize them, and what to do if you lose money.

What is Cold Calling?

Cold calling, a form of telemarketing, is a sales method where a salesperson contacts individuals, companies, or organizations who have not previously expressed interest in their products or services. The aim is to introduce the offer, identify potential customers, and convince them to make a purchase. 

The main industries where this approach is common include insurance, real estate, and financial services, all of which rely on building a solid client base.

It can be an effective way to get leads and reach wider audiences, but it requires skill and persistence. Successful cold callers boast remarkable communication skills, an understanding of what they’re offering, and the ability to handle rejection. Add fraudulent intentions behind the calls and you have an investment scam. 

Common Types of Cold Call Scams

Since cold calling has been around forever, duplicitous minds have come up with various deceptive tactics to execute their schemes. All have the same goal – get the unsuspecting individual or company to invest.

If successful, the money is up for grabs. We have listed the four most common types of cold calling scams – bank fraud, pension deception, investment trickery, and the fake link hoax.

Bank Scams

In the most obvious type of cold calling investment fraud, scammers pretend to be representatives from a legitimate financial institution such as a bank, insurance company, or credit card issuer. 

The plot kicks off with an unsolicited phone call. The scammer resorts to shady techniques to gain the trust of the potential victim, such as providing fake credentials or purporting there is a security issue with their account.

Once he has gained the victim’s trust, he proceeds to request sensitive personal information like bank account details, credit card numbers, or ID data. Pressure tactics are common here; scammers start rambling about a once-in-a-lifetime financial opportunity.

As soon as they obtain the victim’s info, they steal money from their bank account, make unauthorized purchases, or perform identity theft. 

Pension Scam

Con artists often pose as bank or financial institution representatives, as we previously explained, making unsolicited calls to obtain sensitive information from victims. They may tempt individuals with investment or loan opportunities that seem incredibly lucrative, or insist on the urgent transfer of a pension pot.

As soon as you see financial institutions asking for personal or financial information over the phone, and offering high returns with minimal risk, it’s most likely a pension scam. If the call aims to instill fear about potential losses if immediate action is not taken, that’s a clear red flag.

Investment Scam

The majority of money expert cold callers will present a one-off investment opportunity. They claim your risk is minimal and that the return will be significant. Most of the time, it sounds too good to be true because it is.

Nobody will unsolicitedly call you to make you rich. It’s either a cold-calling investment scam or a Ponzi scam aiming to build a pyramid of followers.

Texts With Fake Links

Aside from phone calls, cold-calling scammers may also send SMS messages, emails, or WhatsApp & Telegram messages. This is more common for a trading scam but callers use it as well.

What you have to do is ignore these messages and report them. There is no point in clicking on unsolicited messages offering you overnight wealth.

How to Recognize a Phone Scam?

Recognizing a phone scam is crucial if you want to avoid financial fraud. ANZ New Zealand highlights several warning signs and red flags to watch for. First and foremost, scammers often claim to be from a trusted organization, such as a bank. 

They proceed to create a sense of urgency and demand immediate action. Secondly, they start requesting you disclose sensitive information like passwords or card numbers, which transparent companies would never do over the phone. 

Another common deceptive tactic is to offer a refund or prize in exchange for personal details, aiming to lure potential victims with the promise of huge financial gain. Moreover, ANZ warns against sharing personal information or agreeing to make payments over the phone. 

Anonymous tricksters may also try to access a victim’s computer remotely, posing as tech support. They may utilize apps such as AnyDesk or TeamViewer to request access to online banking or ask for payment to fix a fictitious issue. 

Therefore, you must be wary of unsolicited calls, verify the caller’s identity, and never share personal or financial information over the phone. 

What to Do If I Lost My Money to an Investment Fraud?

In case you have fallen victim to financial fraudsters through cold calling, do not despair. There are several steps you should follow. These guidelines will help you overcome your difficulties and potentially get your hard-earned money back:

• Report the incident to your bank. Explain what happened and provide them with evidence. Request that your account be frozen in case you have shared passwords and related info.
• Inform regulatory authorities and law enforcement. By reporting the cold callers, you will potentially shut down their fraudulent operation and get help from the regulators.
• Consult with a qualified attorney and explore legal options. You may be able to press charges.
• Hire a chargeback company to help you get your money back.

If you need professional assistance, Scam Brokers Reviews is at your disposal. Use the link below to book a free consultation with us and tell our team how it happened. We will come up with the best solution to return your money where it belongs.