UK Government Considers Ban on Finance-Related Cold Calls
The UK government is currently seeking evidence to assess the potential impact of a proposed ban on finance-related cold calls. In a consultation paper issued by HM Treasury, the government aims to gather information on the costs associated with implementing the ban and its effects on businesses. This move is part of the government’s broader fraud strategy, which aims to combat fraud at its root and hold those responsible accountable.
The government’s fraud strategy, announced on May 3, seeks to address the issue of fraud that not only affects individuals and businesses but also undermines public confidence in the rule of law and poses a threat to national and economic security. The government aims to achieve a 10% reduction in fraud compared to 2019 levels by December 2024.
The proposed ban on finance-related cold calls is just one of several measures outlined in the fraud strategy. Other measures include the establishment of a new national fraud squad with over 400 new posts, a ban on SIM farms used by criminals to send scam texts en masse, requiring mass texting services to be registered, changing the law to ensure more fraud victims can recover their money, and implementing the ban on finance-related cold calls.
Cold calling refers to unsolicited calls made by individuals or organizations to market their products or services. While some cold calls may breach privacy regulations, others involve fraudulent schemes where non-existent products or services are marketed. The government’s consultation paper highlights the range of frauds that occur through cold calls, including a case study involving an individual referred to as “Stephen.”
Stephen received a cold call to invest in digital assets and decided to invest £250. To gain Stephen’s trust, the suspect initially provided money back for the first few investments. As Stephen wanted to withdraw some of his funds over time, he discovered that he was unable to do so. Despite attempts to contact the suspect, Stephen lost a total of £65,000.
However, the government acknowledges the legitimate role that the marketing and sale of financial services and products play in the UK economy. In 2021, the financial services sector contributed £173.6 billion to the economy. Recognizing this, the government seeks to understand the potential impact of a blanket ban on cold calling on legitimate businesses operating within the sector.
The government’s consultation paper poses questions to legitimate businesses to assess the consequences of a ban on their operations. Questions include inquiries about the use of cold calling for new or existing customers, the impact of a ban on financial product promotions and sales, alternative methods of customer contact, and the revenue attributed to cold calling.
The consultation period will run until September 27, 2023, after which the government will review the responses and propose a final version of the cold call ban to parliament. Economic Secretary to the Treasury, Andrew Griffith MP, supports the ban and emphasizes the government’s determination to combat fraudulent behavior. He encourages collaboration to cut off fraudsters’ ability to engage in high-pressure tactics through cold calling. Griffith looks forward to receiving input on the best approach to implementing the ban.
The proposed ban on finance-related cold calls seeks to protect individuals and businesses from falling victim to fraudulent schemes. While the ban aims to tackle illegal activities, the government also recognizes the importance of legitimate financial services and products in the UK economy. The consultation process will help the government strike a balance between preventing fraud and supporting legitimate businesses.
More detail via CoinGeek here… ( Image via CoinGeek )