UK Government Considers Ban on Cold Calls for Financial Products, Including Cryptocurrencies

The UK government is considering prohibiting unrequested cold calls regarding all consumer financial goods and services, including digital currencies. A consultation paper was published by the HM Treasury this week, targeting the increase in investment scams, particularly those involving new technologies like cryptocurrencies.

The number of reported investment scams in the UK jumped to 23,900 in the 2022-2023 period, with financial losses approaching £750 million. This follows a recent statement from UK Prime Minister Rishi Sunak.

HM Treasury explained that cold calling is a common tactic used by fraudsters to impersonate legitimate businesses. The real-time nature of these calls allows scammers to adapt their strategies on the fly to manipulate potential victims.

Although there are already some limitations on cold calling for specific financial products like pensions, HM Treasury noted that the current fragmented regulations make it easier for criminals to exploit gaps.

The suggested prohibition would extend to uninvited phone calls that market investments and other financial services to individual consumers, including cryptocurrencies, which have become an increasingly attractive target for scammers. Nevertheless, the proposed regulation would not limit businesses from cold calling other businesses, as the government believes these interactions carry a “fundamentally lower risk.” The consultation is also open to opinions on widening the ban to include other forms of communication like social media video calls.

While proponents of the cryptocurrency industry argue that the technology itself is not the problem and caution against overly restrictive regulations, consumer organizations have expressed support for steps to curb deceptive sales techniques.

The public has until September 27, 2023, to provide feedback. If the proposal becomes law, the Information Commissioner’s Office would be responsible for enforcing the ban, and it already has the authority to issue fines for violations of existing telemarketing regulations.

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