UK Plans to Ban Crypto and Financial Service Cold Calls

The UK government is taking a strong stance against fraudulent activities, as demonstrated by a recently published consultation document. This document proposes a thorough ban on cold calls promoting financial services and products to consumers.

HM Treasury Consultation Paper Seeks Purpose for Ban

In preparation for the ban on finance-related cold calls, the UK Treasury has initiated a consultation and a request for evidence.

This is aimed at comprehensively understanding the potential impact on businesses and the associated costs linked to introducing and enforcing the ban.

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The consultation document highlighted several instances where unsolicited calls have resulted in financial losses for investors, including one case involving cryptocurrencies.

However, it noted that despite previous efforts by the UK government to impose restrictions on cold calling, scammers have often managed to exploit legal loopholes.

To address this, the Treasury has presented a set of 19 questions to engage with stakeholders. The primary goal is to effectively combat scammers while minimizing adverse impacts on businesses reliant on cold calling for customer outreach.

Stakeholders are encouraged to provide feedback on each question outlined in the respective sections and to include any additional relevant insights not covered by the questions. The consultation period will conclude on September 27, 2023.

The consultation document noted that fraudulent actors have long abused cold calling for financial services and products to deceive and manipulate the public. These criminals often target vulnerable individuals and employ deceptive tactics to exploit them.

However, the document emphasizes the government’s unequivocal stance against such behavior. This commitment is evident in the UK government’s decision, part of its Fraud Strategy, to prohibit cold calling for all consumer financial services and products.

The aim is to inform the public that legitimate firms will never contact them to market financial products without consent. Any unsolicited financial cold calls should be regarded as scams, empowering the public to hang up and report such calls.

According to the document, this ban will effectively halt fraudsters’ activities and prevent the emotional and financial harm often associated with cold calling.

Furthermore, the Economic Secretary to the Treasury, Andrew Griffith MP, stressed the importance of collaborative efforts to confront fraudsters by eliminating their ability to employ high-pressure cold-calling tactics.

He claimed that any unsolicited call promoting financial products, including crypto assets and insurance, is a scam and urges the public to be cautious.

UK’s Strategy to Tackle Financial Fraud

The potential ban, which is being discussed within the corridors of power, aims to curb the alarming increase in cold-call-based crypto investment scams that have left many individuals financially devastated.

This initiative aligns with Prime Minister Rishi Sunak’s strategy to combat financial fraud in the UK.

On May 3, the government unveiled an ambitious fraud strategy involving increasing staff by 400 to enhance intelligence-led policing.

Sunak emphasized that fraud accounts for over 40% of all crime, resulting in an annual government expenditure of nearly £7 billion.

He contended that these illicit gains often fuel organized crime and terrorism. Furthermore, Sunak highlighted how technological advancements have enabled these scams and made them increasingly challenging to police effectively.

As a staunch advocate for taking proactive measures against fraudsters, the prime minister underscored that the government’s new anti-fraud plan reflects this unwavering determination.

On June 29, 2023, King Charles III approved the Financial Services and Markets Act, which includes provisions for regulating crypto assets.

This development empowers the Financial Conduct Authority (FCA) and the central bank to oversee and regulate cryptocurrency as an officially recognized activity.