UK Government’s New Fraud Strategy
The United Kingdom is set to ban cold calls selling financial products, including insurance and cryptocurrencies, to crack down on fraud. The National Crime Agency estimates that fraud costs the country approximately £7 billion ($8.7 billion) annually.
The U.K. government announced its new fraud strategy, pledging 400 new jobs to update its approach to intelligence-led policing. The government will work alongside the telecoms regulator, the Office of Communications, commonly known as Ofcom, to use new technology to counter phone number “spoofing,” which would prevent fraudsters from impersonating legitimate U.K. phone numbers.
Wire Fraud on the Rise
According to Bloomberg, wire fraud is now the most prevalent crime in the U.K., with 1 in 15 people falling victim to it. To ensure more victims of fraud get their money back, the government aims to introduce laws that require financial institutions to reimburse victims of authorized fraud.
The UK as a Base for Organized Crime Syndicates
A report published on Jan. 29 by media outlets, the Bureau of Investigative Journalism and the Observer, shows that organized crime syndicates are utilizing the U.K. as their operational base owing to the region’s “lenient regulations.“ Registering a company in the U.K. costs as little as 12 British pounds ($14.85). It requires no form of identification, making it easy for fraudulent companies to register there and gain sham credibility.
FCA’s Approach to Crypto Companies
The U.K. government has been trying to clamp down on cryptocurrency companies operating in the region. The U.K. Financial Conduct Authority (FCA) mandated that all companies engaged in crypto asset activity register with it per the existing Financial Services and Markets Act rules for the digital assets market.
However, the FCA has adopted a strict approach to granting approvals, leading to several crypto-related businesses operating as unregistered entities. The regulator appears to be striving to balance providing a secure environment for investors and promoting innovation in the industry.
Fighting Fraud and Protecting Citizens
U.K. Prime Minister Rishi Sunak reportedly said in a statement that scammers “ruin lives in seconds, deceiving people in the most despicable ways in order to line their pockets.“ He pledged to fight these fraudsters wherever they attempt to hide. The government also promised to put an end to methods commonly used by scammers to reach thousands of people at once, such as “SIM farms.“ The use of mass-texting services will also be reviewed to prevent these technologies from falling into the hands of criminals.
Conclusion: A Step Forward in Tackling Fraud
In conclusion, the UK government’s decision to ban cold calls for financial products, including cryptocurrencies, represents a significant step forward in combating fraud. By working with Ofcom to prevent phone spoofing, introducing laws to reimburse victims of authorized fraud, and reviewing the use of mass-texting services and SIM farms, the government is demonstrating its commitment to protecting citizens from fraudulent activities. The strict approach of the FCA towards crypto companies aims to strike a balance between fostering innovation and ensuring a secure environment for investors. These measures will undoubtedly contribute to a safer financial landscape for the people of the United Kingdom.
