The UK government has unveiled an ambitious plan to combat fraud across the country. This includes extending the ban on cold calls to all financial products and reinforcing measures against number spoofing. Prime Minister Rishi Sunak asserts that the new approach will target fraudsters and block scams at their origin. The goal is to reduce fraud by 10% compared to 2019 levels by 2025.
Expanding Cold Call Ban to All Financial Products
The government will ban cold calls in relation to stop fraudsters from duping people into purchasing counterfeit investments via phone. Criminals have increasingly adopted tactics such as impersonating a family member or a legitimate business to deceive customers.
Santander’s data shows that impersonation scams have been rising, with £10.2 million lost between January and March this year, an 11% increase from the same period the previous year. The average reported loss per customer was £6,906 during this timeframe.
The government plans to consult on a broader cold call ban by summer, with the new legislation taking effect ASAP. While cold calls about pension products are already banned, the new regulation will encompass all financial products. Including various insurance types and cryptocurrency schemes. This will enable recipients of such calls to confidently hang up and report the fraudster.
Combating Sim Farms and Spoofing Scams
Sim farms have become a pressing concern as they facilitate large-scale scamming operations. They do this by hosting hundreds of sim cards that enable fraudsters to simultaneously send out thousands of texts. The government, recognising the severity of this issue, is determined to implement stricter regulations and surveillance to curb the use of sim farms.
In their effort to tackle this problem, the government will collaborate with Ofcom, the UK’s communications regulator, to explore and adopt new technologies to effectively combat number spoofing. These technologies may include advanced call-blocking features, sophisticated caller identification systems, and real-time monitoring of potentially malicious numbers.
By working together, the government and Ofcom aim to create a more secure and transparent communication environment, making it increasingly difficult for fraudsters to deceive victims using spoofed numbers. This joint initiative will promote greater trust in communication channels and help prevent unsuspecting individuals from falling prey to scams.
Extending Payment Delays and Overhauling Fraud Reporting
Banks will now be allowed to postpone processing payments for extended periods, giving them more time to investigate suspicious transactions. This will help reduce authorised push payment (APP) fraud, where people are tricked into transferring money to accounts controlled by criminals. According to UK Finance, £249.1 million was lost to APP fraud during the first half of 2022.
The government plans to replace Action Fraud with a cutting-edge system for reporting fraud and cybercrimes to the police. Supported by a £30 million investment, the new system will offer a streamlined process for online fraud reporting, shorter waiting times, and an online portal for victims to receive timely updates on their case’s progress.
Additionally, the government will ensure that intelligence is rapidly shared with the industry and law enforcement to take prompt action against fraud.
Launching the National Fraud Squad
The creation of a new National Fraud Squad, composed of over 400 specialist investigators, signifies the UK government’s commitment to prioritising fraud as a significant law enforcement concern. This decision follows years of public discontent with the existing Action Fraud reporting centre. Which many victims have criticised for its ineffectiveness and lack of responsiveness.
The establishment of the National Fraud Squad aims to address these concerns by providing a more robust and specialised approach. This new team will undergo extensive training in the latest fraud detection techniques. Ensuring they are well-equipped to handle complex and evolving fraud cases.
The National Fraud Squad will also work closely with other law enforcement agencies and regulatory bodies to share intelligence, resources, and best practices. This collaborative approach will strengthen the UK’s capability to combat fraud and bring perpetrators to justice more efficiently.
Learning from Past False Dawns
While the UK government’s recent announcements to ban cold calls and sim farms are indeed promising, it is essential to remember that there have been false starts in the past. With previous initiatives failing to achieve their intended impact. While banning cold calls and cracking down on sim farms is crucial, these measures alone will not entirely eradicate fraud. Moreover, the £30 million investment, although seemingly substantial, pales in comparison to the billions lost to fraud annually.
To truly make a difference, the government must address other aspects of fraud prevention, such as awareness and improving education. This would involve launching public campaigns about common scams, warning signs, and best practices for safeguarding personal information. Such initiatives would empower individuals to take a more proactive role in protecting themselves from fraudsters.
Collaboration between the public and private sectors is also essential for effective fraud prevention. By working together, government agencies, law enforcement, and financial institutions can share intelligence, resources, and expertise to develop comprehensive anti-fraud strategies that adapt to evolving threats.
