View more on these topics

Ros Altmann: Winning the war on cold-calling

Ros AltmannMost of us are plagued with nuisance calls. How many times have you had an unsolicited approach about PPI or that accident you never had?

Anyone reading this probably knows to ignore them but millions of people are at risk of wasting their time and losing their money if they fall for such tricks.

There is a whole industry established to impoverish unsuspecting consumers who think someone is helping them. Claims management companies organising unsolicited approaches are richly rewarded, taking a cut from customer compensation.

The same applies to companies offering free “pension reviews” or exciting investment opportunities to people who have never requested them. Unsolicited communications are the foundation of almost all scams and frauds.

The Association of Personal Injury Lawyers estimates there are over 50 million cold-calls or texts a year from regulated CMCs, so existing initiatives to prevent them are clearly ineffective. For example, requiring caller line identification from direct marketing salespeople so they can be traced is akin to the law insisting burglars must leave a business card behind. Banning cold-calling can give the public the clear message that anyone who contacts them out of the blue about an insurance claim, investments or their pension is a criminal, so ignore them. The ban is urgent.

After earning substantial sums from whiplash claims and PPI in past years, cold-callers are now encouraging people to claim (often fraudulently) for holiday sickness in the hope hotels will just pay up.

Some startling statistics indicate the scale and growth of this problem, and it is giving Britain a bad name. The number of British holiday sickness claims rose by around 600 per cent last year, with no reported increase in illness at resorts. Indeed, one tour operator last year took 800,000 German customers and 750,000 British holidaymakers to the same resort over the same period. The Germans made 114 sickness claims, while the Brits made over 4,000 claims. Some resorts are threatening price increases for all UK customers or to reject them altogether.

Cold-calling is already banned for mortgages; consumers require similar protection from CMCs and pension companies. The Government has announced it intends to ban cold-calling for pensions but action is required, not announcements. There is no need to delay further.

The Financial Guidance and Claims Bill now going through Parliament offers a golden opportunity to ban cold-calling for CMCs, and it could be used to protect against pension cold-calling too.

Working with other peers, I have tabled amendments to achieve this, yet ministers refuse to agree. We will keep trying at report stage in late-October.The Government would win praise for doing it and there is widespread support. What does it take for policymakers to finally act?

With Brexit dominating the Parliamentary timetable for the next two years, there may be no other legislative opportunity to introduce such a ban. Let’s not miss this one. This battle is  is far from over

Ros Altmann is former pensions minister

Recommended

11

Tyrie gets City backing to be new FCA chair

Former Treasury select committee chair Andrew Tyrie has the backing of key city figures to become the FCA’s chairman next year, according to reports. Current FCA chair John Griffith-Jones announced in July he would be stepping aside next year when his five-year term comes to an end. A number of directors at asset managers, banks […]

17

FOS strategy head defends service against IFA misconceptions

David Cresswell argues some advisers have the wrong impression about the service The Financial Ombudsman Service’s strategy director has attempted to dispel a number of misconceptions he believes advisers have about the complaints adjudicator. In an interview with Money Marketing, David Cresswell also offers tips on how IFAs should approach their dialogue with the FOS. […]

4

Advisers are wrong to break away from bonds

They say politics is more determined by negative drivers than positive. Clown-like or otherwise, Donald Trump, Nigel Farage et al are anti-politicians who embody many of the characteristics that people feel are absent from their mainstream rivals. There has been a clear pendulum swing away from mainstream political institutions as wider disillusionment with the establishment […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Ros will do anything for publicity. There are several good lead generation companies out there and by using them over a 7 year period our company now has over £50,000,000 under management. Many of our clients were in under performing closed funds or with-Profits funds giving very poor returns and are now in a significantly better position. The only firms, which will not obey any ruling on this are the rogue rip off firms who have caused the problem in the first place. The honest good firms will be the ones to suffer.

    • We too have our own in house lead generation company that has helped over 1000 clients inprove there pensions and investments. We supply all our clients to our own direct authorised firm.

      Scammers will always scam. But the real scam is taking away the one thing hat makes people look into there pensions and investments and hats people telling them they need to.
      We regularly review people’s pensions who’s ifa tells them everything is rosy. A pension with a 40% terminal bonus making less than 1% per annum.

      Most ifas won’t help clients with 50k or less in there pot.

      The whole situation is aweful

  2. A worthy but unwinnable war. What about cold calls from overseas? A campaign to raise public awareness of the dangers of engaging with cold callers is the only viable strategy. I tell them to FO.

  3. Cold Calling MUST be BANNED, I am an IFA (30y) and I would be very happy and do, look after clients with as littlie as £20,000 So Ross you get my undying support, although this is the first time I have fundamentally not disagreed with your past articles.

    • 30 years to build your client base. Your renewal/management income.

      How does anyone new come into the market.
      Call centres are the new factories. The new door knocking.

      Please tell me how you started in the buskers and got your clients some 30 years ago.

      Not all call centres are scammers.
      But all these new rules will only take legitimate companies out the market and only scammers will be left.

      2 people on this comment list have taken over 150million away from scammers and helping.
      I know companies who are transferring 30 million a month and helping consumers.

  4. There are also unfortunately a number of IFA’s with many clients on a 1% charge or greater, giving little or no service. They of course oppose cold calling as of course are keen to keep this income rather to lose it to a lower charging firm offering proper ongoing servicing as opposed to an annual letter.

  5. The FCA is willing to pay a has-been celebrity to highlight the PPI deadline (2 years away) and yet doesn’t run campaigns highlighting the scams out there?

Leave a comment