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Financial cold calls are one step closer to being banned

Paloma Kubiak
Written By:
Paloma Kubiak

The Government is proposing to ban cold calls offering any financial product or service, as figures reveal victims lost £750m to fraud in 2022-23.

Phone calls from businesses aiming to sell products like sham cryptocurrency schemes, mortgages and insurance could be banned as part of the Government’s latest clamp down on fraud.

Once in force, it would mean people receiving a cold call offering these types of products would know they are scams, hopefully leading to fewer people falling victim to fraud. Cold calls relating to pensions are already banned.

It comes after data from the City of London Police revealed victims lost £750m in the year to 2023, and follows the Government’s fraud strategy published in May which initially suggested a cold call ban on financial products.

The latest proposals would also see a specialist team called the National Economic Crime Victim Care Unit rolled out to all police forces across England and Wales to provide support to victims of fraud.

Last year, its teams supported more than 113,000 victims and it is also estimated to have stopped more than £2.8m being lost to fraud.

Hang up and report cold calls

Security Minister, Tom Tugendhat, said: “Fighting fraud is at the heart of our campaign to fight crime. Fraud doesn’t just lead to financial loss, it can destroy confidence and lead to severe stress. That’s why it’s so important that victims get the best possible care and support.

“The cold calling consultation is an important step forward in our efforts to block fraud at source. It will have a major impact once it is in force.”

Andrew Griffith, Economic Secretary to the Treasury, said: “Cold calling for financial services and products has long been used by fraudsters to manipulate and trick members of the public into scams. These cold-hearted criminals will often purposely target the most vulnerable and use a range of deceitful tactics to take advantage in any way they can.

“We will ban cold calling for all consumer financial services and products, so the public can be sure that it’s not a legitimate firm if they get a call about a financial product out of the blue without their consent.

“We want people to feel confident to put the phone down and report these illegitimate calls.”

The consultation closes on 27 September.

Tips to avoid being scammed

Here are some top tips from AJ Bell to help you avoid falling victim to fraud:

Not expecting a call about finances? Hang up

If you get a call or text from a phone number you don’t recognise, particularly about an ‘investment offer you can’t refuse’, simply hang up or do not reply to the text. When a call from an unknown ID claims to be from a bank, verify them by checking the details on the business’ website and call that number back before providing any of your own personal data.

Don’t deal with unregulated ‘advisers’

Criminals are mostly using modern tactics with social media, emails and text messaging their main port of call to swindle people.

However, there are still local fraudsters who operate door-to-door, mostly targeting the elderly. If one of these comes knocking, do not make any decisions until you are sure they are FCA-regulated advisers.

Reject unsolicited high-stake offers

Scammers will usually guarantee huge returns through attractive investments all over the world. If any profit is guaranteed with an investment, that is a clear indication the call is likely to be a rip off.

Ignore callers who are resistant to verification

Take your time while checking the validity of whoever rings you. If a caller refuses to give their information or becomes aggressive when pressed, they are likely a scammer and as always, if you’re in doubt, hang up.