The government has today published proposals which will see cold-calling banned for all financial products.
An estimated £750 million was lost last year by Brits who fell victim to investment fraud.
A ban on pensions cold-calling has been effective, with the number of people receiving suspicious calls about their pension halving since the ban was introduced in 2019.
Treasury economic secretary Andrew Griffith says he wants the public to “feel confident to put the phone down” if they receive a call out of the blue about a financial product.
Tom Selby, head of retirement policy at AJBell, was one of the earliest and most vocal campaigners for a pensions cold calling ban in the UK.
Selby comments: “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.
“An estimated £750 million was stolen through investment fraud last year. These scams will often begin with an unsolicited approach from someone via phone, text message, email or on social media. As the government notes, a mish mash of rules and regulations mean it can at times be less than clear when a cold call is against the law and when it is not. One of the benefits of a wider cold-calling ban would be that everyone is absolutely clear that if they receive a call out of the blue about their finances, they should hang up the phone.
“For this cold-calling crackdown to work we need two things: tightly worded legislation, to ensure nefarious contacts are specifically targeted, and alegitimate threat of enforcement where someone breaks the new rules. The plans also need to go hand-in-hand with greater responsibility being taken by internet giants like Google for paid-for scam adverts, something which the Online Safety Bill can hopefully bring into UK legislation.
“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 have both resulted in rising vulnerability in the UK which, depressingly, 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.
“The grim reality is that, even with new rules and tough enforcement, scammers will continue their attempts to plunder people’s hard-earned savings. It is therefore vital, regardless of what the government does, that Brits keep their wits about them and are cautious when they are contacted out of the blue by someone they don’t know about their finances. Much of this is common sense, but it could save you from financial misery.”