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MPs urge Govt to bring in cold-calling ban by summer

Telephone-Phone-Business-Finance-General-700.jpgThe work and pensions select committee is calling on the Government to ban pension cold-calling through the Financial Claims and Guidance Bill next year, as well as making people either take or opt out of guidance before accessing their pension.

The committee opened an inquiry into pension freedoms in September and has published its report today.

Committee chair Frank Field says each day a ban is not in place people are being “avoidably conned out of their life savings”.

The committee wants a ban in place by June next year.

Field says the “strongest weapon in the armoury” against scams is good advice and guidance but people are not taking it.

He says: “Making guidance the default option combined with the ban on cold-calling would be a simple but big step forward in consumer protection in the era of pension freedoms. The Government should use the Bill that has just arrived in the commons to legislate to protect pensions now.”

Royal London policy director Steve Webb says: “There can be no excuse for the Government continuing to delay a ban on cold-calling.  With every passing week, more and more people are being scammed, and a scam often starts with a call or email out of the blue. The scammers get more inventive and more creative with every passing week, and the danger is that regulators are always two steps behind.”

Hargreaves Lansdown policy head Tom McPhail says it is important the ban and other interventions are properly thought through.

He says: “The ban would have to be policed and would have to avoid interfering with legitimate business activity; guidance at retirement is useful for many but it is questionable this can be delivered effectively to all those approaching retirement by public services alone.”

McPhail adds: “If it is to be made the default, the Government should explore how to harness the resources of the pensions industry to engage and guide its customers.”

Former pensions minister Ros Altmann wants the Government to act urgently in bringing in the cold call ban.

She says: “Making the FCA responsible for banning both cold-calling and also the use of leads obtained from unsolicited approaches would best protect people. FCA implementation could strip firms of their licence if they benefit from cold-calling, thereby undermining the business models of cold-callers most effectively. Cold-calling for mortgages was banned long ago, now we must do this for pensions too.”

The committee will hear evidence on the British Steel Pension Scheme on 13 December, which Field has described as a “honeypot for scammers”.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. If cold calls are banned, presumably customers then need to identify what advice they need.

    My experience of customers is that they only act if prompted to do so.

  2. Banning regulated firms from accepting from third parties any leads obtained by cold calling sounds easy but the problem with such a ban will be differentiating between people who, of their own volition, have responded to an ad. offering a free pension review as opposed to those who’ve been hooked with a cold call and talked into agreeing for their contact details to be passed to a regulated adviser. If they’ve agreed to the latter, it may be difficult to classify the follow up call as cold.

    Having in the past been approached by outfits offering leads to people who’ve “expressed interest” in a free pension review, I get rid of them simply by stating that we don’t do free reviews of anything. But, for as long as the practice of contingent charging is allowed to continue, those who routinely operate on this basis are likely to continue to buy such leads.

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