Cold calling is the unsolicited act of contacting a person over the phone with the aim of selling a good or service. It is a significant contributor to fraud in the U.K., with the government reporting 4.2 billion pounds (US$5.3 billion) in losses in 2022 alone, across millions of individual offenses.
Although legitimate businesses also use cold calling to obtain new customers, criminals have mastered the art of using various shady, high-pressure tactics to scam people out of their money when they least suspect it. Frequent victims include the elderly and vulnerable people, who are particularly susceptible to receiving fraudulent life insurance calls from unauthorized agents who charge significant fees for their “expertise”.
“Cold calling for financial services and products has long been used by fraudsters to manipulate and trick members of the public into scams,” said Economic Secretary to the Treasury Andrew Griffith. “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.”
In 2022, the government estimated that 40 percent of all mobile users in the country received a suspicious call or text in the space of three months from August to October alone. For landline users in the same timeframe, this figure was 53 percent.
This is a significant contributor to fraud, which accounts for 41 per cent of estimated crime in England and Wales, the Home Office said. The objective behind the new proposal is therefore to “ban cold calling to cover all consumer financial services and products, with the aim of preventing people from being exploited by this practice.”
Should it be passed into law, “consumers will know that any unsolicited calls about financial services and products are a scam and will be less likely to engage,” the Home Office said. Griffith added that the proposal should empower the public to immediately recognize the caller as a scammer, hang up the phone, and report it to the authorities.
The 4.2 billion pounds in reported losses from fraud in 2022 is likely a lowball figure, the government said, as it only accounts for reported incidents. The Office for National Statistics estimate that only 14 percent of total fraud cases actually get reported to authorities and that nearly one in five businesses have been a victim of fraud over the past three years.
To put these numbers into context, in 2022 there were 3.7 million individual fraud offenses in England and Wales, and one in every 15 adults were reported to be a victim, according to a report by the Treasury.
Following the proposal’s approval, cold calling will be outlawed as a practice across all businesses, banks, firms, and credit unions.
“This ban will make the public aware that they will never be called by a legitimate firm trying to market a financial product without their consent,” Griffith said. “This will stop the fraudsters dead in their tracks and prevent the emotional and financial harm that cold calling can cause.”
