Government launches crackdown on fraud: what you need to know

The government has announced a major crackdown on fraud in the UK, with actions such as extending the ban on cold calls to all financial products and clamping down on number spoofing. 

Prime Minister Rishi Sunak says the new strategy will 'take the fight to these fraudsters, wherever they try to hide' and block scams 'at the source'. The aim is to reduce fraud by 10% on 2019 levels by 2025.

Here, Which? takes a closer look at what the government plans to do to tackle fraud and how it will affect consumers.

Ban on cold calls and scam texts

Cold calling to sell financial products will be banned in an attempt to stop scammers cheating people into buying fake investments over the phone.

Pretending to be a loved one or legitimate business – such as a bank – has become popular with criminals trying to trick customers into handing over money or personal details. 

Data from Santander reveals the practice is on the rise, with £10.2m worth of impersonation scams between January and March this year – up 11% from the same period in 2022. The average reported loss per customer was £6,906 for this period. 

Cold calling about pension products is already banned and this new rule would cover calls selling any financial product, including types of insurance and cryptocurrency schemes. The aim is to make anyone receiving such a call confident enough to hang up and report the scammer. 

The government says it will consult on a wider ban on cold calls by the summer, with the new law coming into force as soon as possible after.

There will also be a crackdown on so-called Sim farms – devices that can house hundreds of Sim cards sending out thousands of scam texts at once.

• Find out more: how to stop nuisance phone calls

Number-spoofing crackdown

The government plans to work with Ofcom to use new technology to further clamp down on number spoofing, so fraudsters cannot impersonate legitimate UK phone numbers. 

'Spoofing' is used by scammers to trick victims into thinking they are being contacted by a trusted caller, such as their bank, to persuade them to pass on personal details that will allow the scammers to steal their cash.

Which? research in 2019 found the practice was widespread in the UK and, in 2021, we found that many banks weren't providing customers with enough protection from spoofing scams. 

• Find out more: how to spot a scam

Payment processing delay

Banks will also be allowed to delay payments from being processed for longer, so that suspect payments can be investigated.

This could help prevent future incidences of authorised push payment (APP) fraud, where people are tricked into sending money to accounts controlled by criminals. The latest Finance UK figures showed that £249.1m was lost to APP fraud in the first half of 2022.  

• Find out more: what to do if your bank won’t refund you 

Better reporting and investigations

There are plans to replace Action Fraud – the UK's current fraud reporting centre – with a state-of-the-art system for victims to report fraud and cybercrime to the police. 

In 2019, a four-month Which? investigation uncovered serious issues with the reporting system.

Backed by a £30m investment, the replacement will provide a simpler route for reporting fraud online, with reduced waiting times and an online portal to allow victims to get timely updates on the progress of their case. 

The government says it will also ensure intelligence is shared quickly with industry and law enforcement, so that action is taken early to stop fraud. 

A new National Fraud Squad with over 400 new specialist investigators will also be launched, making fraud a priority for the police. The government claims 70% of fraud in the UK either starts overseas or has an international link, so there will also be a crackdown on fraudsters operating from abroad.

Which? and the fight against scams

Which? has been campaigning to stamp out scams since 2015 and has set up a scam alert email to help people stay one step ahead of scammers.

Rocio Concha, Which? director of policy and advocacy, said: 'The fight against fraud has progressed far too slowly in recent years and, in particular, more action is needed to guarantee that big tech platforms take serious action against fraud.

'The government must ensure that the Online Safety Bill delivers meaningful protections for consumers against a flood of online fraud infiltrating the world’s biggest search engines and social media sites.

'It’s positive to see the government at last producing a strategy that recognises a joined-up approach with the ambition that data is shared between industry and law enforcement is needed to tackle the UK’s fraud epidemic, which has such a devastating financial and emotional toll on the lives of victims.

'Ultimately, consumers will judge the success of this strategy by whether they end up with better fraud detection, prevention, support and redress.'

• Find out more: scams help and advice from Which?

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