The government has opened its consultation on banning cold calling for all consumer financial services and products, including insurance and mortgages.
In the consultation, entitled Ban on cold calling for consumer financial services and products the Treasury says it will explore the best way to design and implement this ban.
“Our objective is to maximise the effectiveness of this ban in stopping fraudsters, while limiting any unintended impacts on legitimate contact by firms selling useful financial services and products,” the document says.
“We want the public to know that any unsolicited call marketing financial products such as a cryptoasset or insurance is a scam, and not to fall prey to fraudsters.”
It is estimated that between August and November 2022, over half of all UK landline users received a suspicious call.
Mortgages and insurance are specifically mentioned as areas that are to fall within the scope of the cold calling ban.
In May Health & Protection reported that compliance expert Branko Bjelobaba believed the insurance sector may need to challenge the government’s incoming ban on cold calling.
Other areas include any product or service of a banking or payment nature, including electronic money and cryptoassets, investments – including tangible items such as whiskey and wine which are market as an investment, and credit and debt – including individual voluntary arrangements.
“By capturing a wide range of financial products in this ban, scammers should have no opportunity to claim they are acting outside the prohibition by changing the financial product they focus on,” the document says.
“Cold calling for financial services and products has long been used by fraudsters to manipulate and trick members of the public into scams,” Andrew Griffith MP economic secretary to the treasury said in the foreword to the consultation.
“These criminals will often purposely target the most vulnerable members of our society and use a range of deceitful tactics to take advantage in any way they can.
“The government will not tolerate this behaviour,” he said.
“Our objective is to maximise the effectiveness of this ban in stopping fraudsters, while limiting any unintended impacts on legitimate contact by firms selling useful financial services and products,” Griffith said.
Potential loopholes
But there may be some potential loopholes under certain situations.
“The proposal will not apply to interactions where the customer has knowingly and freely given, clear and specific consent to be contacted for marketing purposes,” the document says.
There could also be other exceptions, when the call recipient expects to receive cold calls.
“In this consultation, the government is seeking views on whether to allow an exception for FCA [Financial Conduct Authority] and PRA [Prudential Regulatory Authority] authorised businesses, when the business and the receiver of the call have an “established existing client relationship” and the relationship is such that the recipient envisages receiving cold calls,” the document says.
“The inclusion of this exception would be to enable legitimate financial services firms to market to their existing customers.
“A similar exception was included in the pensions cold calling ban. However, the cold calling ban for claims management services contains no such exemption.”
But the government is open to the views of how the ban could impact businesses.
“Given that the ban is at an early stage of development, the government does not have a full picture of the impact on businesses of the proposals, or the costs associated with introducing and implementing the ban,” government said.
“Therefore, alongside the consultation, the government is issuing a call for evidence to collect information and data that will allow a more rigorous assessment of the impacts on businesses.
“The government invites all interested parties to provide feedback and empirical evidence on the potential benefits and unintended effects associated with the proposed ban.”