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Cold calling ban to fight financial fraudsters

Cold calling ban to fight financial fraudsters

No hiding place for criminals, promises Sunak

Cold-calling will be banned for all financial products as part of a national strategy to tackle the £7 billion-a-year cost of fraud in Britain.

The ban will include unsolicited phone calls from those trying to sell any type of insurance or cryptocurrency schemes as they are seen as the most common scams used against victims, particularly older people.

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It emulates a ban on cold-calling about pension products, which was introduced in 2019. The ban will be combined with an advertising campaign so that, over time, fraudsters who try to con victims with unsolicited calls will be shut out.

Rishi Sunak, who promised in November that a new national fraud strategy would be introduced “shortly”, said that plans to attack scams at their source would prevent more “cold-hearted crimes” in the first place. “We will take the fight to these fraudsters, wherever they try to hide,” he said before an event at which he will join Suella Braverman, the home secretary, to publicise the plans.

A new National Fraud Squad will be created, with 500 specialist investigators deployed to target fraudsters, replacing the complex structures that have been blamed for the low rates of fraud prosecuted by the police.

The squad will create 400 new posts dedicated to fighting fraud, adding to 120 people already employed full-time in the work, although this will still mean that only 1 per cent of police officers are allocated to tackling fraud.

This is despite fraud now being the most common crime in Britain, representing 41 per cent of all offences, according to Home Office figures. One in 15 people fall victim to fraud each year, costing members of the public a combined £7 billion per year. Nine in ten internet users have encountered online scams.

The system for reporting fraud to the police will finally be replaced, two years after the government made the pledge following a Times investigation that exposed failings with the Action Fraud service.

An undercover reporter found that Action Fraud had trained call handlers to mislead victims into thinking their cases would be investigated when most were never looked at. Managers in charge of collating fraud reports at the organisation’s call centre mocked those who had lost money as “morons”

The Home Office’s plans to overhaul the service will include a £30 million investment and a simpler route for reporting fraud online, with reduced waiting times and an online portal to allow victims to get real-time updates on the progress of their case.

A new system will be up and running within a year, the department has said, although it has not committed itself to renaming the service, meaning it could continue to be called Action Fraud. Other measures in the national fraud strategy include the ability for banks to delay payments for longer than the present 24-hour period to enable transactions to be investigated.

The government will also ban so-called Sim farms, which are devices that can be loaded with hundreds of phone Sim cards and are controlled from a computer. Fraudsters use them to send tens of thousands of scam texts at once, cheaply, quickly and easily.

Sim farms are increasingly used for advance-fee fraud, where criminals send phishing messages that ask people to pay an upfront fee for fake goods or services, such as asking for an unpaid fee on a Royal Mail package, or a fake text from a bank asking the recipient to click on a link to confirm a payment. Advance-fee fraud has risen eightfold since the Covid-19 pandemic started, with 454,000 offences last year, against 60,000 in the year ending March 2020.

The strategy also commits the Home Office to working with Ofcom to deploy new technology to crack down on “number spoofing”, which is used by fraudsters to impersonate legitimate UK phone numbers from abroad.

Announcing the plans last night, Sunak said: “Scammers ruin lives in seconds, deceiving people in the most despicable ways in order to line their pockets. We will take the fight to these fraudsters, wherever they try to hide.”

However, campaigners have accused the government of watering down its plans. Ministers were proposing to force companies to pay victims of online financial scams that were facilitated by their websites or services. The government said that the Online Safety Bill would introduce a “duty of care” on large companies to protect their users from fraud, although the money raised from fines against firms who fail to do so would not go to victims.

Rocio Concha, from the consumer watchdog Which?, said: “The government has been dragging its heels on giving tech giants more legal responsibility.”

The Royal United Services Institute said that the allocation of 400 new officers to the new fraud squad would not lift the resources dedicated to tackling fraud above the present 1 per cent of police resources allocated to the crime.

Source: The Times

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