Government consults on financial product cold call ban

The Government is consulting on how to ban cold calls offering any financial products. It says that once the ban is in force, it will be clear to anyone receiving a call for a financial product that the call is a scam, which in turn will reduce the number who fall victim to scams of this type. The plan was announced in May’s Fraud Strategy and the Government says it will be supported by the APP fraud reimbursement mechanism strengthened under FSMA 2023 and the failure to prevent fraud offence currently under debate in the Economic Crime and Corporate Transparency Bill.

The consultation looks at how to design and implement the cold calling ban while still allowing “legitimate and beneficial” communications. It calls for views and evidence on:

• the main harms caused by cold calling to market financial services and products;
• what the scope of the ban should be – FCA says that the current patchwork ban makes it hard for both businesses and consumers to understand whether a call is legitimate, so widening the ban will clarify this for everyone;
• the Government proposes that the ban captures all live telephone calls to individuals and is seeking views on the extent to which cold calling takes place by live electronic communications other than calls and the impact if these are not covered by the ban;
• door-to-door marketing – and whether this takes place sufficiently that a ban could be imposed and be effective;
• any other firms of cold calling that cause harm to consumers;
• whether the ban should extend to communications with sole traders and partnerships;
• what products should be captured – including any products or service of a banking or payment nature (including crypto), mortgages and insurance as well as white goods warranties and protection plans, investments including tangible items marketed like an investment such as wine, and credit and debt;
• what products and services should be outside the ban;
• how to implement the ban – the Government reminds that the ban on cold calling for pensions was achieved through amending the PECR using powers under the Financial Guidance and Claims Act, and that this method can be used for phone calls but possibly not for other live communications;
• while the Government thinks it will be clear that non-marketing and consensual calls will still be allowed, it is asking for views on whether to allow an exception to the ban for authorsied businesses which have a relationship with the recipient such that the recipient would envisage receiving cold calls;
• enforcement – the Government proposes the ICO will have the relevant enforcement powers; and
• how best to raise awareness of the ban.

It is also interested to understand the impact on business and business models, and on whether the proposals would have any disproportionate impacts on persons with certain protected characteristics.

The consultation closes on 27 September.