Legality of cold-calling by salesmen

Does anyone know whether the following is legal here:

- financial salesmen (insurance brokers, etc.) cold-calling you (at work)?
- salesmen claiming to be experienced financial advisors who can provide financial advice/retirement planning/estate planning when their only qualifications are as salesmen and they are simply trying to sell an investment?

Some information in Cold calling from telephone service providers and Unsolicited telephone calls and junk mail. There are a few other threads on the subject if you have a looksee. Seems it is illegal, but hard to do much about unless you can pin down exactly who the person is.

Lorelei: is this a new case where people called you or still the same guys which sold you bad stuff in the past? Besides: I have already posted in another thread the regulations about cold calling and so has Bob the editor. Any parts you did not understand or need more details? Just let me know... Happy to help you against the bad seeds in my profession anytime!

Cheerio

Thanks for the links, Keydeck.


It's the same outfit as before. I had a look at the threads linked by Keydeck but haven't found the other threads in which you and Bob posted about the regulations (I searched for "cold calling" and "cold callers" but only found the threads linked by Keydeck).

I am looking for the actual titles of the regulations/laws which indicate that cold calling is illegal. I'd also be interested to know whether it's legal for salesmen to pass themselves off as financial advisors.

Two answers:
1. The law governing unwarranted cold calls is the "Gesetz gegen den unlauteren Wettbewerb" or "UWG". I copied some explanation following for you, unfortunately in German:
Cold Calls, also Werbeanrufe, denen der Verbraucher nicht ausdrücklich zugestimmt hat, sind in Deutschland verboten. Das ist im Gesetz gegen den unlauteren Wettbewerb (UWG) ausdrücklich festgehalten. Diesem Gesetz zufolge handeln Unternehmen unlauter, wenn sie Verbraucher in, so wörtlich, "unzumutbarer Weise" belästigen. Und genau eines solche unzumutbare Belästigung ist laut § 7 UWG anzunehmen

"bei einer Werbung mit Telefonanrufen gegenüber Verbrauchern ohne deren Einwilligung oder gegenüber sonstigen Marktteilnehmern ohne deren zumindest mutmaßliche Einwilligung".

Eine solche unlautere Werbung ist also unzulässig. Wer trotzdem so handelt, kann auf "auf Beseitigung und bei Wiederholungsgefahr auf Unterlassung in Anspruch genommen werden" (§ 8 UWG). Auf Deutsch heißt das, Unternehmen, die verbotene Telefonwerbung betreiben, können abgemahnt werden können - mit entsprechenden finanziellen Folgen für sie. Auch Schadensersatz, Gewinnabschöpfung und die Verhängung von Bußgeldern sind laut Gesetz möglich.

There are a number of lawyers who have specialised in going after the cold calling companies and they can be easisly found in the internet for your region. However, the problem is that you'll have to prove the call. Since most calling companies do use non-disclosed numbers, you will not be able to show on a phone statement that you have received an incoming call. If you could not see the number on the display too, it gets even harder. Therefore the best advise is not to pick up the phone if you can not see who is calling or immideately and at first ask whoever is calling you if you can have a name and number to call back. If they don't give you this basic information, hang up immideately and smolder in your anger about wasted time until the law will be changed eventually that those companies have to disclose your number. Without telling the other side and asking for their o.k. it is also not allowed to tape such a phone call, it is indeed in Germany a "Straftat"/felony according to §184 StGB and whatever one records in secrecy is inamissable at court. But you could - if you can tape such calls technically that is - simply inform the other side that you want to record the conversation and that they surely won't have a problem with that----- most likely they'll hang up immideately then.
All in all, you have the problem to prove who called you and when and you'll need of course a streets address too in order to have a lawyer go after them. For calls you have had in the past, chances are probably zip that you can provide the proof, right?
2. Financial Advisor is not a protected profession like in the U.K. or other places, the more is the pity for people like me trying to uphold certain professional standard getting mixed up with the bad apples. However, since July the "Vermittlerrichtlinie" clearly demands that someone contacting you or visiting you to give you financial advise has to declare at the beginning if he is a "Vertreter" which means he can only offer you the services of his insurance employer, a "Mehrfachagent" which means that he can only offer you advise and products out of a limited number of insurances with which he or his company have binding contracts. Some of the largest financial advise companies in Germany belong to this group, like AWD for instance. This makes sure that people understand that the advise is not entirely independent or unbiased in the search for solutions/products. Last but not least there is the "Unabhängige Makler" or independent broker, a rare species who can give reall independent advise because he can get and offer you everything from the market. Still, and I am aware of critizsm here to the GErman kind of independent broker, he will so far get mostly a commission from the insurance, bank or investment fund you take in the end and this can influence in some cases the selection process, especially if insurance brokerage is your only area where you can generate income. If, like me, a broker is well established in other areas as well (like mortgage brokering or investment advise), profits from insurance advise play only a minor role and it is easier to give unbiased recommendations. But there is also in Germany for insurances the "freie Honorarberater" which means an advisor working only on fees being paid by you to him and he will not get a commission from the insurance. But this is still very rare and is not yet accepted well among the German population who are used to get (bad) advise for free rather than paying a skilled financial adviser by the hour or by project. As of recently I try to give ExPats the choice but so far here too the majority rather elects the prevailing commission system than direct fees for advise.
Depending on when you received the call the caller at that time might not yet have been oblidged to give you upfront the information about his status though. But for future reference you or any other Toytowner should drop the first question what status according to the "vermittlerrichtlinie" the "financial advisor has to get a clearer picture.

Hope this helps you, please understand that not all financial advisors are sharks swimming out there just bite off a seizable share of your savings... But they are there in abundance. Hopefully this will change soon in Germany too...

Cheerio

Thanks, Starshollow, for making it clear to everyone out there what an independent broker is and for pointing out what most of the "independent" financial advisors,eg, à la AWD really are.You´re a credit to the profession and to Toytown!

Thanks!
All I can say is: I try...

Just one more wild idea: if there is some interest for it, I could write a short WIKI on the legal difference and status of "financial advise" in Germany now after the introduction of the "Vermittlerrichtlinie", i.e. what people can and should expect and demand from someone who approaches them with regards to financial advise like full disclosure of his status (dependent agent, multiple agent or independent broker) and what the difference means... If a couple of you Toytowners out there think that this would be helpful for you and others, let me know.

Cheerio

Starshallow: thanks very much for all that info! A reliable WIKI entry of that kind would certainly be useful.

The outfit who contacted me were (1) trading on a name very similar to that of a well-known registered IFA company in the UK and (2) claiming to be "independent financial advisors" or "IFAs" or "financial consultants" or "financial experts" providing "independent financial advice"/"retirement planning", etc. for expats. The fact that they target UK nationals suggests that they want clients who will think they already know what an IFA is and take them at face value. They deny that they are salesmen, although it is clear from the company's recruitment ads and recruitment website that that is all they are.

As long as an ExPat is resident in Germany I would recommend doing business with German entities or at least with companies where the contract is governed under German law. The problem with off-shore companies will always be how and where to dispute legal claims and what law will be applied to that case. If you have troubles with some German bank, insurance or financial advisor, the legal situation is quite clear at least.
Will work on the WIKI and inform everybody once it is ready (and once Bob-the-editor has worked it over in WIKI-format).

Cheerio

That sounds very sensible.


The outfit I dealt with solves that problem by referring its clients to what is supposedly an independent supervisory body for the offshore financial advice industry... which is apparently a thing of its own creation.