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Paul Lewis: Why pensions cold calling ban leaves me cold

It passes the political test of seeming to do something while costing taxpayers nothing, but the finer details of the cold calling ban are disappointing

It is a hard thing to be against but I am not excited about the recent announcement that cold calls will be banned. Partly, of course, because they will not. The ban will only extend to calls (and I include texts and emails in that word) about pensions.

Cold calls from boiler room share rampers will not be banned. Nor will those from firms offering “investments” in airport car parks or shipping containers. Calls from personal injury firms will continue because the Government has separately decided not to ban those. As will those from PPI claims management firms.

Also exempt will be calls from any firm you are or have been a customer of – what the Government calls “an existing client relationship”. It does not say that relationship has to not be about pensions or, indeed, current. The legislative definition is awaited.

What is more, the rule will only apply to firms based in the UK. That means calls from firms (or crooks) in the 195 other countries of the world will not be affected.

Advisers hit out at holes in cold-calling ban

Where it does apply, the rule will be enforced by the Information Commissioner’s Office. It draws evidence from a variety of sources but principally the public. So people who get an illegal cold call will have to report it. If the number is withheld (some still are, though they should not be) that will be a fairly pointless exercise.

Even if the number is displayed, it is hard to see how any action can meaningfully be taken unless there is a recording of the conversation. The ICO tells me it will build up a “pattern” from complaints.

Who is this ban expected to stop? Criminals. People who call up to steal your money. Thieves who, if they are caught, face prosecution and jail. Is the added threat of a possible investigation by the information commissioner going to make them pause for a picosecond before they withhold their number and make the call? Of course not.

So what is its purpose? It passes the key political test of seeming to do something while costing taxpayers nothing. It enables ministers to be outraged – “it’s utterly unacceptable people who have worked all their lives to build up a pension pot should be subject to scams which may leave them out of pocket” – and misleading – “people should know that cold calling, apart from exceptional circumstances, is banned”.

Supporters of the change tell me it will enable all of us to get the message out there that any cold call is illegal, so just hang up. But it will not. Most cold calls will still be legal. Some cold calls about pensions will still be legal. The message will just get more complicated.

If you get a cold call, text or email about pensions that is not from abroad, nor from a firm you are a customer of, or once were, nor one you might have been referred to by your adviser or solicitor, and is not from an administrator of your pension fund or from a representative of a fund belonging to someone who has died and where you may be a beneficiary, or from a firm trying to track down people with pensions who have moved – breathe! – then it is illegal. Probably.

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

One of my Twitter contacts said it was now up to journalists to get the message across. She added that, if only we had given more publicity to The Pensions Regulator’s Scorpion campaign, £15m of pension money would not have been stolen last year.

It is nice to be appreciated. But anyone who thinks writing articles or broadcasting about these dangers will stop everyone being robbed is living in the comfortable mental luxury of Cloud Cuckoo Land.

I do not know a single personal finance journalist who has not discussed the dangers of cold calls and pension scams. I do so frequently. Of course, I hope what I do will help some people avoid the thieves. There is some evidence from my inbox that, in individual cases, it does.

But the people who read, watch or listen, then remember what we say and bring it to mind at the right moment are a small subset of the population. When people continue to be robbed, it will not be the fault of journalists.

The real fault lies with financial firms not willing to give up cold calling altogether. Those very firms who were falling over themselves on Sunday to put out well prepared statements about how pleased they were that ministers have acted and what a great thing the ban is.

The Whitehall PR machine enabled them to send that out then by providing the press release outlining the ban three days before the Sunday embargo, along with quotes of outrage and concern by ministers. Cue easy and uncritical coverage.

Not until Monday were the details set out in a 28-page document. It included this key paragraph:

“The Government intends to work on the final and complex details of the ban on cold calling in relation to pensions during the course of this year, then bring forward legislation to deliver the ban when Parliamentary time allows.”

That is civil service jargon for some time after Big Ben starts striking again.

I would love to be able to say that every cold call is from a crook. So I do. My message is this: If you get a cold call, assume it is from a thief and put the phone down or delete it unread. It could save you thousands of pounds.

That message will not change when this “ban” is brought in. Sorry, did I say “when”? I meant “if”. I cannot find the Twelfth of Never in my diary.

Paul Lewis is a freelance journalist and presenter of BBC Radio 4’s ‘Money Box’ programmeYou can follow him on Twitter @paullewismoney


PFS calls on Government to broaden pensions cold-call ban

The Personal Finance Society has said it wants the Government’s pension cold-calling consultation to be extended to general investments and other forms of communication. A consultation on implementing a pension cold-call ban was launched this month after being trailed in November’s Autumn Statement, which confirmed telephone calls to unsolicited clients would be illegal. The PFS […]


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There are 11 comments at the moment, we would love to hear your opinion too.

  1. Christopher Petrie 23rd August 2017 at 1:21 pm

    Well done Mr Lewis. I’m sure most IFAs will agree with this article of yours (not always the case!).

    It will take a long time but we must all work to put a stop to all these cold calls which is the antipathy of true capitalism. In pensions, but in most other areas too,

  2. Sadly you are correct Paul – nothing will change.

    So that means I will have to listen to more clients in years to come who have been ripped off by a ‘financial adviser’ even when it was a scam.

  3. What about the not inconsiderable army of self employed people who have still not addressed their pension needs.. In the early days of my business many moons ago it was standard to be referred to an individual who was a friend or work colleague who had found our services useful. The plain fact is that hundreds and thousands of individuals in the UK have done nothing to address their retirement needs and many will never do so until they are prompted in one way or another. So it is now a case of “more fool them – let them suffer if they can’t be bothered” because now those new to the industry are unable to make genuine pension calls offering advice as to how to build up a retirement fund for their own future, because it is now illegal to approach them in order to prevent those who have already built up pension funds from being scammed.
    The latest BBC video states that an individual of 25 needs to fund £300pm for life to build up a fund equivalent to sufficient to buy the equivalent pof the basic state pension.
    Is this not like all other good ideas to protect us from ourselves, protect the few and damage the retirement prospects of a whole lot more.

    • “The latest BBC video states that an individual of 25 needs to fund £300pm for life to build up a fund equivalent to sufficient to buy the equivalent of the basic state pension.”

      No they don’t, they just need to pay their NI contributions.

      Yes, I know the State Pension might not exist in 40 years’ time, but we can only plan based on what we know.

      And £4,500 a year starting at 25 (after adding basic rate tax relief, but ignoring auto-enrolment employer contributions) assuming a modest return of 2% above inflation grows to £308,000 *in today’s money* at 67, which assuming drawdown at 4% per annum gives you considerably more than the State Pension. On top of the actual State Pension.

      This kind of bunk doesn’t cause 25 year olds to say “oh goodness, I must start saving much more than £300 per month into a pension”, they say “well I might as well not bother then”.

      • @ Sacha

        Assuming their are no charges whatsoever applied to your investment and the wind is blowing in your direction (most of the time)

        History has told me over 35 years that the majority of s/e (men) often take somewhat of a caveman attitude towards retirement planning..and when confronted with the maths its either
        1. I can’t afford it
        2. How much? No way…
        3. I’ll be dead before I reach retirement I’d rather enjoy today whilst I can.

        take your pick

        • @ Snooty

          2% above inflation over a 42-year investment timeframe is a conservative assumption after taking into account charges, unless you’re with SJP or MetLife or something.

          No argument with the rest.

  4. FWIW, my view is that no one in the government believes that such a ban is realistically enforceable. Its main impact is likely to be that, having been reported in all branches of the national news media, it will put potential victims on their guard. That’s about the best that can be hoped for.

  5. Stephen Foreman 23rd August 2017 at 3:04 pm

    I agree with Mr Lewis but, in reality, the biggest threat comes from none other than the Claims Management Companies.
    I have a client whose ridiculous CMC led “complaint” has been upheld by FOS. The net result will be he loses 30% of his fund to the CMC without hope of recovery. The FOS turns a blind eye to this even though I have tried to make them aware of their foolishness. It is wholesale fraud and an utter disgrace that still nothing is being done about it.

    • TBF to the FOS, it has no power to dictate to complainants whether or not they engage the (often fraudulent) services of a CMC. If they’ve been foolish enough to sign away 30% of whatever settlement is awarded, that’s their stupid fault.

      Once it takes over responsibility for regulating CMC’s, the FCA may impose a cap on the cut that CMC’s are permitted to take, but it may take many years to do so, if it ever does.

    • Overcharging is not fraud.

  6. hmmm… sadly I think Paul is likely to be right about this.

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