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Government to ban cold calling on Financial Products

A new government legislation is to be introduced in the United Kingdom to crackdown on scam calls for financial products

A photo of Daniel Sharpe-Szunko, the author

By Daniel Sharpe-Szunko

Published on: 4 May 2023

2 min read

Government to ban cold calling on Financial Products

A new government legislation is to be introduced in the United Kingdom to crackdown on scam calls for financial products.

The recent upturn in fraud activity in the UK makes it now the top criminal activity, affecting 1 in 15 of us. According to the media regulator Ofcom, 41 million people were targeted with suspicious calls and text messages last summer.

Fraud accounts for more than 40% of criminal activity in the United Kingdom, and it costs the government around £7 billion annually.

The UK wide ban is set to come in to force later this year to prevent fraudsters from selling illegitimate insurance products and cryptocurrency schemes.

The government has said that the new blanket ban will tackle the issue of cold calling scams head on as well as covering legitimate calls. It has said that “anyone who receives a call trying to sell them products such as cryptocurrency or insurance will know it’s a scam”.

This legislation follows a similar directive was introduced in 2019 to govern cold calling for pensions following a spree of attempted fraud towards consumers in the UK.

What does the new legislation mean?

If you receive a cold call or what you suspect to be a cold call, you will know that this is fraudulent. Businesses in the United Kingdom will no longer be legally allowed to adopt this method of engaging with potential new customers.

People in the UK have been targeted by these fraudsters for too long and the new rules are set to stamp out these practices.

 How will the legislation be regulated?

A new fraud task force called the National Fraud Squad has been launched by the City of London Police and the National Crime Agency. The team will be recruiting to fill 400 new posts, to add to the current 120 members of staff.

What do others think about the new legislation?

Emily Thornbury, Shadow Attorney General from the Labour Party has said that the plans ignored “tens of billions being lost to fraud against business and the government, and relies on estimates of the cost of fraud to members of the public that are seven years out of date”.

Labour and the Liberal Democrats have both suggested that the plans are “too little, too late”.

Alistair Carmichael, Home Affairs Spokesperson for the Liberal Democrats, has said “with only one new investigator for every 9,000 cases last year, the new fraud squad is just a drop in the ocean compared to what’s needed”.

The consumer group Which? has come out to welcome the new plans but has also criticised the government for acting too slowly.

For more of the latest UK financial news, check out our MPO News section.

Resources

House of Lords Library – Financial fraud and vulnerable people

Office for National Statistics – Nature of fraud and computer misuse 2022

National Crime Agency (NCA) – Fraud

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