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Nic Cicutti: Cold-calling ban must not fall by the wayside

About 15 years ago, as I was about to embark on a new career as a self-employed journalist, it occurred to me one potential additional string to my bow might be that of a money coach.

There was no regulated activity involved: for those whose likely needs included product-related financial planning, I offered guidance on how to find an IFA and what things to look for when searching for a good adviser.

After about two years I ceased this line of activity. But during that time, I was contacted by several alert IFAs who had visited my website and asked if I was interested in deals to introduce any clients in need of regulated advice exclusively to them.

While the potential rewards on offer were significant, I declined every approach made to me. Linking up with one, or even several good advisers spread geographically across the UK would have meant a significant danger of no longer seen as impartial by the rest of the IFA community.

The role of introducers paid to search out and intermediate between advisers and prospective clients appears to have largely withered on the vine these days. Yes, there are organisations that charge for leads, while “free advice seminars” are not uncommon as are other marketing stunts. But the idea of cold-calling punters and lining them up for advisers to sell products to is no longer considered very appropriate by most of the industry.

Profile: Darren Cooke on being the face of pension cold calling ban

Indeed, the idea of cold-calling is largely considered unacceptable. Quite what my wife’s Uncle Archie would make of this is anyone’s guess: he spent 15 financially fruitful years as a life insurance salesman in the 1980s and early 1990s making random calls to small firms listed in his local Yellow Pages in a bid to drum up business.

But as advisers have almost completely vacated this area of activity, a far nastier breed of cold-callers and self-styled “introducer” has filled the void. Along with millions of other consumers, I have received more than a dozen calls in the past two or three years from script-reading touts offering to put me in touch with someone who can carry out a free “review” of my pension, “backed by the Government” no less.

Scammers abound

The lack of knowledge and understanding about pensions from these cold-callers is astonishing. When I asked one woman calling last year the difference between defined benefit and defined contribution schemes, she put the phone down on me.

According to the Treasury last year, more than 11 million people at or close to retirement age are targeted every year by cold callers. While most are sensible and know to end a call from one of these scammers pretty quickly, a small minority will end up losing large chunks of their life savings.

A Treasury document says there were 30,000 DC scheme transfers in 2015/16, representing £1bn of assets. Industry estimates suggest fraudsters could be behind as many as one in 10 pension transfer requests. Up to £20m is scammed in this way every year – and that figure may turn out to be on the low side.

It is to the industry’s credit that it has rallied behind a campaign led by Red Circle Financial Planning director Darren Cooke, aimed at banning cold callers. Almost 9,000 signatures were gathered last year, mostly from within the industry in an effort to persuade the Government to ban this activity.

Last November, it seemed as if this campaign had succeeded. The newly appointed Chancellor Philip Hammond announced in his Autumn Statement that a measure to ban cold-calling would be introduced imminently. Consultation on the substance of a ban was launched shortly afterwards but since the election there has largely been silence since then.

Govt departments join forces over pension cold calling

If a ban on cold-calling were to be introduced, the logical place for such an amendment to be inserted would be within the Financial Guidance and Claims Bill currently making its way through Parliament. However, it is reported that Peta Buscombe, the parliamentary undersecretary of state for work and pensions, is saying the complexity involved in devising an effective ban means more consultation is needed. Meanwhile, the Government “does not believe it is the right time for the ban to be included in the Bill”.

In the Lords, Ros Altmann has renewed calls for a complete and immediate ban on cold-calling. She points out data from the Action Fraud centre for fraud and cybercrime showed that while 2,000 frauds had been reported since 2014, only seven suspects have been summonsed or charged over these scams. There has not been single conviction in that time.

Ros adds if the ban does not make it into the Financial Guidance and Claims Bill, there is no other legislative vehicle where this might happen.

Parliamentary observers point out this is the only personal finance bill in the current two-year legislative programme set out within the Queen’s Speech. In other words, it is literally a case of do it now or face delays of several years before a ban is introduced.

While we wait, many thousands more older people, almost by definition the most vulnerable in our society, will lose some or all of their pension savings. This must not be allowed to happen.

Nic Cicutti can be contacted at



Govt eyes pensions cold-calling exemptions for ‘legitimate’ advisers

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Cold-calling ban welcomed as advisers await next steps

The Government ban on pensions cold-calling has been welcomed by advisers despite some reservations from firms that rely on cold-calling for customer leads. Chancellor Philip Hammond confirmed it would seek to ban pensions cold-calling in the Autumn Statement today, with scammers facing fines of up to £500,000. The Statement reads: “The government will shortly publish a […]


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Robert Milligan 8th August 2017 at 1:26 pm

    Nic what is actually happening right now is, A Text Message is sent out to all and sundry, the Unsuspecting public return the text or even phone back the number, Its an unregulated person/firm, they organise a self employed “signature courier” to visit the “Potential client” having confirmed to the caller they have a pension pot worth discussing, they hold introducer forms and transfer of Servicing Rights doc’s to be signed which along with copies of ID are taken away, o yes and mostly a spare copy! has been signed!! they then introduce this client to the Regulated Advise Firm, who, having obtained the Regulated Information, contacts the client to discuss the policies, and then arranges for yet another unregulated person to visit the client for a second appointment to complete the application forms, so the client has not actually met with a Regulated Person, the funds are then transferred to the new scheme, and then the adviser having received his initial Charge, resigns from the on going servicing. Then the New Provider receives a signed Investment Authority, posts out the cheque, and hey presto, the money has gone!!! remember!! at the first appointment signing a spare copy!!

  2. Nic

    I agree with the ban but it would help if our regulators and law makers took the problem seriously years ago when we IFAs started reporting problems.

    Action fraud are a bad joke. They are stats keepers – nothing more than a spreadsheet in the sky. The FCA not much diffent. We have reported ‘marketing companies’ with their normal rotating directorships (with ‘pension administators’ and ‘investment managers’) to avoid prosecution and we even reported a pensioneer trustee who pocketed a clients money. What happened – nothing when he pulled ‘I am poorly’ card even though he was speaking to new potential clients. I eventually gave up.

    I am not alone in reporting such scams.

    Darren Cooke at Red Cricle has done the industry and public a great service by keep pushing this issue but he is a lone voice in a very large bureacracy and struggles to get heard. That bureacracy would rather spend its money and time on more complex systems collecting information and statistics that nobody ever uses, than actually resourcing something that would protect the public.

    I do understand why this happens as the former is easy to justify but the latter needs difficult decisions, new thinking and courage. That is in short supply sadly.

    Therefore I would not hold my breath on a cold calling ban

  3. Fiddling while Rome burns. Better to introduce a total ban without delay, as a matter of urgency, then iron out any flaws later than to do nothing. What, I wonder, is the government’s rationale that doing nothing for an indefinite period is better than doing something NOW?

  4. Robert Milligan 8th August 2017 at 2:00 pm

    Advice must be Face To Face, by Regulated Advisers, unless its to an existing client, by agreement with the client, too many firms are using unregulated Appointment sitters, and any Regulated Firm caught using these people should be immediately Banned for Life, Including those with Management accountability, ie NETWORKS

  5. Many thanks for adding your voice to the campaign with a well written piece Nic.

  6. Plenty of us predicted before the roll out of the pension scammers’ freedoms that this would become a problem. A much more serious financial problem has been created by the Government for those scammed, compared to the detriment suffered by some which the “freedoms” were intended to solve. It’s outrageous they continue to expose people to financial ruin in this way, when measures should have been brought in from the start of the new rules.

  7. Nic

    As I posted elsewhere cold calling is but the tip of the iceberg. The modern incarnation is the spam e-mail and the social media tweets and messages.

    What is being done about them? Surely they are just as insidious.

  8. Christopher Lean 8th August 2017 at 9:04 pm

    Whatever the rights and wrongs of cold-calling in the early 1990s, the idea was to sell a savings product. Admittedly, primitive by today’s standards and front end loaded with the dreaded capital units.

    However, there was no general intention to defraud. The new cold-caller is out to get hold of pension funds to steal or milk them.

    The 2006 rules let in the scammers and a new industry was created.Cold-calling needs stopping now.

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