The UK Government Proposes Banning Cold Calls for Cryptocurrencies
The UK government has proposed banning unsolicited cold calls for all consumer financial products and services, including cryptocurrencies.
The Ban to Protect Consumers
The UK Treasury issued an advisory document this week. The ban aims to protect consumers from investment fraud, which has increased as criminals exploit new technologies such as cryptocurrencies.
Investment fraud reports submitted to UK authorities rose to 23,900 in 2022-23, with losses close to £750m. The document features a recent announcement by UK Prime Minister Rishi Sunak.
“Scammers often use cold calling to pretend it is a legitimate business so that they can take advantage of the high pressure they are putting on the people they are calling. The use of real-time calling offers a unique opportunity to manipulate potential victims, enabling the scammer to instantly adapt their approach and tactics.
Expanding the Ban
While cold calling is already restrictive for financial products such as pensions, the Treasury said the blended approach causes confusion and allows fraudsters to find loopholes.
The proposed ban would cover unsolicited phone calls, marketing investments, and other financial products to individual consumers. This includes cryptocurrency, which is one of the fastest-growing targets of scammers.
However, the ban will not prevent companies from marketing to other companies. The government says there are “inherently lower risks” in business-to-business cold calls. The consultation is also seeking feedback on extending the ban to other communication channels such as social media video calls.
Advocates of the cryptocurrency industry argue that the technology itself is not to blame for the scams and warn that too broad regulation could stifle innovation. But consumer groups have welcomed proposals to crack down on misleading sales tactics.
The public consultation will close on 27 September 2023. If enacted, the Information Commissioner’s Office will enforce the ban on cold calling, which can already issue fines for violating telemarketing rules.