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Govt to ban pension cold calling in Autumn Statement

(Photo by Dan Kitwood/Getty Images)

Chancellor Philip Hammond will ban pensions cold calling in the Autumn Statement next week with scammers facing fines of up to £500,000.

Under the proposed regime, all calls where a business has no existing relationship with the consumer will be forbidden. This includes scammers targeting those who are opted-in to receiving third-party communications.

The announcement follows the pensions sector getting behind a petition to ban pension cold calling that was started by Red Circle Financial Planning director Darren Cooke in September.

The proposals also include wider measures to crack down on pension scams including giving firms more powers to block suspicious transfers.

The Treasury says scammers could be behind as many as one in 10 pension transfer requests.

The proposals will also suggest making it harder for scammers to open fraudulent pension schemes. It plans to do this by stopping small self-administered schemes from setting up by using a dormant company as the sponsoring employer.

A statement from the Treasury says there is one pension cold call made every eight seconds with almost 11 million pensioners targeted each year.

According to the Treasury, savers reported estimated losses of almost £19m to pensions scams between April 2015 and March 2016.

The Treasury statement says: “With signs that pension fraud is on the increase, the Chancellor believes that introducing hard-hitting changes – to stop scams before they occur – is more important than ever.”

The Government will consult on the proposals before the end of the year and the next steps will be announced in the Budget.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. And how exactly will this be enforced?

  2. I still maintain that it’ll be virtually impossible to police cold calls from overseas or from those who hide behind the 141 prefix. Other than going through a possibly lengthy process of entrapment, it’ll be impossible to track these people down.

    Like many other advisers (I imagine) I receive occasional calls from outfits trying to persuade me to buy pension leads. The way to get rid of such callers is simply to state that we don’t do free reviews of anything. Tell them that and they just dry up and go away.

    Were the FCA to ban free reviews and any business transactions based thereon, these lead generators would have no one to whom to sell them and the market would die a natural death.

    Given that the FCA has declared its view that it doesn’t like conditional selling, i.e. the adviser getting paid only if he can persuade the client actually to do something, which throws impartiality out of the window from the word go, one has to wonder why it hasn’t banned not cold calling but, instead, free reviews on the part of regulated adviser firms. (To me), it seems so obvious.

  3. It IS so obvious in your simplistic world Julian. But the real marketplace doesn’t work like that.

    Free reviews are done by unregulated parties, who ‘Need tame IFA to sign off many transfers’ – to quote a recent tweet – so:

    FCA rules don’t impact on the free reviewer, and

    The adviser has a client who pays an advice fee.

    You’ll have seen this often enough in FOS and POS decisions.

  4. Some of the negative comments miss a couple of points:

    1) Although scammers may move overseas this is not a reason to try and stop them.
    2) It means that in future people will know that the call cannot be legitimate and therefore MUST be a scam – much easier to explain to people.
    3) As mentioned by Adam, any transfer of safeguarded benefits > £30,000 need a tame financial adviser to sign it off. The ban should at least take them out of the loop.

  5. but this would also be detrimental to all the people who are helping lots of clients but are calling customers to offer good financial advice, which they otherwise wouldnt look for.
    surely we should be stopping the routes these scammers are using and not stopping the calls.
    unless you can stop the scammers from calling by only allowing regulated companies to make the calls.
    we as a company make calls to get people interested, and offer a initial free consultation and review on there pensions, we are fully regulated and helping our clients improve there pension and investment arrangements.
    One off our main providers is royal london with there governed portfolio.

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