The government has published plans to ban cold calling on all financial products, amid a sharp rise in investment fraud.
In a call for evidence, the Treasury said it was exploring the most effective way to design and implement the ban.
Fraud now accounts for over 40% of all estimated crime in England and Wales, with 1 in 15 adults falling victim to fraud in 2022. It is estimated that a staggering £750 million was stolen through investment fraud last year. Unsolicited calls are one of the most common tactics used by investment fraudsters to dupe people into buying fake investments or financial products. Between August and November 2022, half of all UK landline owners said they received a suspicious call.
A cold call ban on pensions was rolled out in 2019 and has proved successful, with the number of people receiving suspicious calls halving since the ban was introduced.
This latest proposal would see this widened to cover other financial products including mortgages, insurance schemes and cryptoassets.
Tom Selby, head of retirement policy at AJ Bell, welcomed the Government’s proposals.
“Financial scams are a scourge on society and ruin lives, so any move to protect more consumers from different types of fraud is extremely welcome. Governments cannot stop scams altogether, but they can place significant barriers in the way of those intent on committing fraud.”
Selby said for the cold-calling crackdown to work, the government would need to introduce tightly worded legislation and a legitimate threat of enforcement when someone breaks the law. Selby also called for internet giants like Google to take responsibility for paid-for scam adverts.
Selby continued: “The successful campaign to ban pensions cold-calling in 2019 was never supposed to be just about pensions. We have always warned that the vast majority of fraud takes place outside of pensions, usually in the form of investment ‘opportunities’ that turn out to be at best missold and at worst entirely non-existent.
“The ban on pensions cold-calling therefore needed to be seen as the beginning of a wider effort to tackle scams more generally and beef-up education. The pandemic and the subsequent cost-of-living crisis, is like blood in the water to fraudsters. The pandemic in particular has also, understandably, likely meant progress in tackling scams has not been as fast as some would have liked.”
Selby said that even with the new rules and tough enforcement, scammers will continue their attempts and urged people to ignore unsolicited calls to discuss their finances and be wary of overseas or crypto investments promising high returns.
The government consultation is set to close on 27 September 2023.
