The government highlighted the prevalence of scams perpetuated via cold calling.
U.K. regulators want to ban cold calls for consumer financial services, and the crypto sector will likely be one of the affected industries. This is part of the U.K. Treasury Fraud Strategy introduced in May to curb fraudulent activities in the country.
In a recent consultation paper published by His Majesty’s Treasury, the government has invited public input regarding the potential impacts of a complete ban on businesses. Stakeholders are encouraged to provide their perspectives and supporting evidence on this matter.
The consultation paper presented various case studies illustrating instances where scammers employed cold calling to deceive investors. One of these cases specifically revolved around cryptocurrency.
While the individual’s identity was altered, this particular case highlighted an investor’s unfortunate loss of £65,000 after being persuaded to invest in cryptocurrencies via a cold call.
The paper, citing data from OFCOM, said 80% of U.K. landline users received suspicious calls between August and November 2022. Thus, these case studies and the rise in suspicious calls further show the need to regulate cold calling.
“Cold calling for financial services and products has long been the tool of choice for fraudsters seeking to manipulate unsuspecting individuals into scams, especially targeting the most vulnerable,” the paper noted.
Regulations governing cold calling have proven largely ineffective, prompting the move towards an outright ban. This ban encompasses a range of products and services, notably crypto assets, banking, insurance, mortgages, and various tangible investments. However, exceptions will be made for cold calls when consumers provide explicit and specific consent.
In recent months, various nations have intensified efforts to combat cryptocurrency-related fraud. In Australia, prominent banks have taken proactive steps, including suspending payments to high-risk crypto exchanges and implementing enhanced security measures to protect their customers better.
Meanwhile, Belarus is pursuing legislation to prohibit decentralized exchanges and peer-to-peer trading, aiming to channel all cryptocurrency transactions exclusively through regulated exchanges.
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Author: Oluwapelumi Adejumo