Last year, investors in the United Kingdom lost a staggering £750 million to investment crimes. The culprit is scammers cold calling their potential victims using their phones encouraging them to trade in businesses including cryptocurrency. As a result, the UK treasury published a consultation paper proposing to ban cold calling by fintech in the country which was already presented by the Financial Conduct Authority (FCA) in May.
Andrew Griffith, the economic secretary to the Treasury stated “The Government will not tolerate this behavior,” while criticizing the increasing cold calls for financial services and products that would victimize the most vulnerable people in the country.
The treasury noted investment losses from cryptocurrency-related cold calling despite the UK’s restrictions. Culprits seek help to bypass these rules. The UK government argues that scammers will switch products to evade laws if cold calling isn’t restricted, and clarifies the ban won’t hinder finance and crypto firms from marketing to consumers.
The new regulation aims to address the existing loopholes in the current laws by ensuring the following:
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- Consumers will be informed that legitimate firms will not approach them with unsolicited marketing for financial services or products
- Consumers can report any financial cold calls they receive as scams.
- Legitimate businesses will have precise rules to adhere to in promoting financial products
- Authorities can take legal action against UK firms that will continue to do cold-calling
- Scammers can’t bypass the ban
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The treasury put forth 19 questions to stakeholders to ensure maximum impact on scammers and minimum effect on businesses that rely on cold-calling leads. The consultation will close on September 27.
