Debt charity StepChange has welcomed the Government’s announcement today of an 8-week consultation and call for evidence on proposals to ban cold calling for consumer financial services and products.
This action forms a critical part of the Government’s Fraud Strategy, aimed at preventing fraudsters from tricking people into buying fraudulent investments such as sham cryptocurrency schemes, mortgages, and insurance.
Fraudulent investment schemes have been a growing concern in the UK, with losses totalling £750m between 2022-23, according to data from the City of London Police. The newly proposed ban signifies an essential step towards safeguarding potential victims.
Upon the conclusion of the consultation and the ensuing implementation of the ban, individuals receiving cold calls related to these financial products will be immediately alerted to the scam, thereby significantly reducing potential victims.
Richard Lane, director of external affairs at StepChange, said: “The Government’s move to ban cold calling for consumer financial services and products is very welcome progress in the fight against scammers who pose a significant threat to financially vulnerable consumers.
“We have seen too many cases where clients’ financial positions have been made worse by services taken out as a result of unscrupulous and unsolicited calls.”
Lane further expressed support for the inclusion of debt services and IVAs within the consultation’s scope but also conveyed a note of caution: “The consultation specifically places debt services and IVAs in scope, but a ban on cold calling will not be enough to stop the harm caused by fraudulent online ads from unregulated IVA lead generators and ‘warm callers’ that follow up.
“These callers have someone’s details, but their intentions may be no less unscrupulous. We’ve seen many consumers in need of debt advice at a vulnerable time preyed upon by firms posing as debt advice charities, who often route them towards an IVA from a provider paying high referral fees. The Government must use this opportunity to finally end this long-standing harm.”
