The Government has confirmed the ban on pension cold-calling will not be extended to all investment products as IFAs spot a number of issues with how new legislation will be implimented.
Yesterday the Government confirmed measures to protect savers from pension scams, including a ban on pensions cold-calling, which will now also include emails and text messages.
In their consultation response document, the Treasury and the Department for Work & Pensions say a number of respondents to the consultation said the cold-calling ban should be extended to all investment products because scams can occur with fraudsters referring to “alternative investments” instead.
The Government confirmed it does not consider a ban on cold-calling in relation to all investment products is proportionate, which has garnered a mixed response from advisers.
— Martin Bamford (@martinbamford) August 21, 2017
Fact & Figures Chartered Financial Planners managing director Simon Webster says: “In general terms all pensions mis-selling has started from a cold-call and that is widely accepted within the profession and elsewhere so that is something they need to get rid of.”
However, he adds: “Decent professional financial advisers I speak to are too busy to employ marketing firms to do make cold calls and drum up business. It [raises] the question what kind of business is going to be promoting investments to Joe Public by telephone. I am not overly comfortable with the idea that cold-calling for this kind of business is appropriate.”
Interesting to hear pension cold calling ban on @BBCRadioLondon as a measure to protect elderly. It’s the pre retired that are most at risk
— David Hearne (@dontdelay) August 21, 2017
Cavendish Ware associate director Roy McLoughlin says well-known investment firms use lead generation and cold-calling to generate business.
He says: “Whether we like it or not, because of the lack of advisers, one has to address that people will still seek out a form of advice and therefore as long as it is responsible and people are made to declare their status we have to take that different ways of communicating with the general public are acceptable.”
The bongs may have fallen silent, but pension scam calls won’t until new ban comes into effect. Estimated to be 8 scam calls every second. pic.twitter.com/S3wmWAvzMA
— Alistair McQueen (@HelloMcQueen) August 21, 2017
The Government response also confirmed that the Information Commissioner’s Office, which will enforce the ban, will not be able to take action against firms based overseas because they are outside the UK’s jurisdiction. The exception to this is if the calls are made on behalf of a UK company, but will likely not hit some overseas unregulated schemes and Qrops opportunities.
The Government says: “Respondents generally appreciated this point. A number of respondents said that an effective awareness campaign would mitigate the risk of consumers being scammed by overseas firms.”