NASD Alert: Call Center Abuse

Seven Tips for a Successful Call Center Experience

If your existing account has been transferred to a sales-oriented call center, or if you open a new account that is serviced in this type of environment, the following tips will help promote a successful experience:

One: If you receive a "welcome" letter or other notice that your account has been, or will be, transferred to a call center or investment center, contact your representative or brokerage firm to ask questions about this change to your account. For example, you may want to ask:

Will I have an individual representative assigned to me that I can contact? Will he or she know me, my account and investment experience and objectives?

Will my new representative be permitted to provide recommendations on all types of investments?

What services will I receive from the investment or call center? How will these differ from the services I previously received?

Will I pay the same commissions and fees for the services I receive?

Two: Be wary of calls from call center representatives that lead to recommendations to move money out of existing investments and into new ones, particularly into a firm's own mutual funds or other investment products.

Three: If a particular investment product is being recommended, don't be afraid to ask how the representative is compensated if you purchase the product.

Four: Ask whether you are able to establish a relationship with a single call center representative. You may be allowed to do so. Take down the full name of any representative that provides investment recommendations or tries to sell you a product. Use NASD BrokerCheck to make sure the brokerage firm and call center representative are properly registered and to research the disciplinary history of a firm or registered individual.

Five: Help ensure suitable investment recommendations by making sure each representative you speak with understands your risk tolerance, financial circumstances, investment objectives and any other information pertinent to recommendations that he or she might make. Accurately portray your financial situation and level of financial expertise, and be sure to update this information as circumstances change.

Six: Understand mutual fund share classes and the different costs and expenses associated with each. This will help you determine whether a switch from one mutual fund share class to another is in your best interest. To learn about mutual fund share classes, read NASD's Investor Alert, Understanding Mutual Fund Share Classes.

Seven: If a mutual fund switch is recommended, make sure you know the fund's name, investment objectives and fees and expenses. Be suspicious if the recommended fund is outside of your existing fund family: Ask if there is a similar fund within your existing fund family and the cost -- if any -- associated with such an exchange. Ask for a side-by-side comparison of fees and expenses between your existing fund and the recommended fund. Use NASD's Mutual Fund Expense Analyzer to compare investment objectives, fees and expenses, including a CDSC schedule, and other fund information.

Where to Turn for Help

If you have a problem with a call center representative that the firm cannot resolve to your satisfaction, you may file a complaint online at NASD's Investor Complaint Center.

Remember, you can also transfer your account if you feel that you are not receiving the quality of service that is best for you. For more information, see NASD's Understanding the Account Transfer Process.