Disclaimer: Our website and publications aim to give you general information to help you make financial decisions. It is not advice, nor can it take account of your own particular circumstances. Our helpline can answer general enquiries about financial products and services on 0300 500 5000, and give you information and pointers to help you work out what’s right for you. For advice with a view to making decisions about your own circumstances you should consult a financial or other professional adviser.

© The Financial Services Authority.

On the phone

If you are being contacted directly by a firm selling financial products, you can do several things to protect yourself.

  1. Don’t be pressurised into giving information without thinking about it – you can always hang up if you feel you are being given the hard-sell. Don't feel rude doing this; you have not asked them to call you. This is known as cold-calling and there are only certain reasons why, and times when, companies are allowed to try to contact you in this way. The Office of Fair Trading's (OFT) website explains this more fully – see Related links.
  2. You can opt out of unsolicited calls by getting in touch with the Telephone Preference Service. They’ll add you to a list of people who do not want to receive cold calls – see Related links. By law, companies must respect your wishes if you are on this list. But if you have an existing relationship with a firm (for example you have an account or a policy with them), this will not apply. Even so, you can contact the firm directly.
  3. Don't give your personal details over the phone. Genuine firms are unlikely to ask you for your personal details over the phone, and certainly not for complete passwords or PIN numbers.
  4. If you have a huge phone bill that cannot be explained, check for rogue diallers in your computer. This is where scam software has found its way into your PC, and dials expensive premium rate numbers without you even being aware.
  5. Know your rights when shopping from home – see the OFT's website at Related links.

Dealing in shares

Once you are on a share register, it is possible for anyone to get hold of your contact details. If a stranger phones out of the blue and tries to convince you to buy shares in a company you have never heard of, take great care.

If they persuade you to buy, you could be left with worthless shares, and no recourse to complain or claim compensation from the UK authorities.

Always make sure that the firm you use is on our Register before handing over your money. If they aren’t regulated by us and things go wrong, you won't have access to complaints and compensation procedures. To find out if a firm is on our Register, see Check our Register.

If you decide to go ahead, check the current share price independently through a trusted website or via a broker. Also, take time to do your own research before buying, starting with the company’s annual report.

Be aware that you may find it difficult to get confirmation of what shares you hold from a firm that has contacted you by phone, and it could be even harder to sell them.

Regulation S Stock (RSS)

This is an American ruling which allows US firms to sell stocks overseas that are restricted or controlled for sale in the US because they do not meet listings standards.

These shares are often issued at a discount to their normal US saleable equivalents, but most of this discount is kept by the broker.

You cannot sell these shares back to the US for at least a year, and even then you must pay a US lawyer to remove the marked legal restriction from the share certificate before selling is possible. This could cost more than your shares are worth.

People in this position are frequently targeted by inappropriately–named recovery rooms. They may contact you with an offer to get the restriction removed, only to disappear once you’ve handed over money for their so-called services.

Check who you are dealing with, and understand the liquidity of what you are buying before you part with your money. The Securities and Exchange Commission – the US's financial services regulator – is a good place to start – see Related links.

The National Association of Securities Dealers (NASD) in the US also has a BrokerCheck Service to check the history of American brokers – see Related links.

By investing in RSS, you are putting yourself at risk of being targeted by a boiler room or share scam. Find out more in Share scams, or see the OFT's website – see Related links.

If you have already bought restricted shares, you have three options open to you:

  1. Pay to have the restrictions lifted. This will make them tradable but is also likely to involve an administrative fee.
  2. Wait for the 6 month or 1 year holding period to end. The restriction will then be lifted and the shares may become tradable. However, there's no guarantee your shares will have held their value by the end of this period and if you purchased them from an unauthorised broker it is likely they will have little or no value.
  3. Arrange for a private sale of your stock. Remember, restricted shares cannot be traded in the US whilst the restriction is in place. Because of this, and the limited market place, authorised UK brokers are unlikely to be able to assist you with arranging a sale or giving you advice about restricted shares. So it will be difficult for you to sell the shares privately before the restriction has lapsed.

The SEC has information on their website about selling restricted and control securities but you may have to contact them to find out more – see Related links.

For tips on how to stay safe online see the UK banking industry's Bank Safe Online website – see Related links.

The Metropolitan Police has a special Fraud Alert website, set up to assist in combating specific types of fraud, and to prevent you becoming a victim of crime – see Related links.