As part of its Fraud Strategy, published on 3 May 2023, the government announced its intention to ban cold calling for all financial products, so that anyone who subsequently receives unsolicited calls trying to sell them financial products such as cryptocurrency or insurance will treat it as a scam.
Under the Financial Guidance and Claims Act 2018, the government has already introduced a ban on cold calls from personal injury firms and pension providers, which applies unless the consumer has explicitly agreed to be contacted. If the government proceeds with its latest plans, this ban will be extended to cover ‘all financial products’. The aim is to prevent people from being exploited by cold callers into buying fake investments or financial products, although it may also impact legitimate businesses that use practices classed as ‘cold calling’ under the new measures.
The government plans to consult on the ban on cold calls by summer 2023, with implementation to follow ‘as soon as possible’ afterwards. Whilst the government announcement states that the ban will cover all financial products we expect that this will be contested by those businesses that use cold calling legitimately and therefore the exact scope of the ban remains to be seen.
These reforms will add to the practical challenges faced by firms in developing compliant marketing and distribution strategies; which are already subject to increased scrutiny and change as a result of reforms from other regulators, including the FCA. In designing these strategies, it is important that firms do not inadvertently miss out the panoply of consumer protection legislation which sits alongside regulatory requirements for financial services firms.