From Ros Altmann:economist and pensions,
    investment and retirement policy expert

  • pensionsandsavings.com

    Banning cold calling

    Banning cold calling

    4 July 2017

    • Government needs to urgently ban cold calling not just keep consulting
    • Clear support across political parties and pensions firms for a ban
    • Protecting the public from fraudsters needs higher priority
    • Cold call ban could make it clear for the public that reputable firms will not approach them unless they have specifically asked 

    The Government is about to issue yet another consultation on banning pensions cold calling – asking yet more questions about protecting the public, rather than just getting on with it.

    The case for banning unsolicited approaches seems clear and unequivocal:  Cold calling for mortgages was banned years ago and the public needs the same protection for other financial matters. To offer someone a mortgage, they must explicitly request to hear from your firm. But any scam company can buy a list of ‘prospects’ and contact them out of the blue to offer them a free pension review that leads to them losing their entire pension in a fraudulent scheme.

    Public need to be better protected : With the pension freedoms giving people better access to their pensions, the opportunity for scams has increased. It is right to give people more flexibility and choice over their pension savings, but it is also vital that alongside this, the Government does more to effectively protect them against the rising number of fraudulent unsolicited approaches.

    Official figures show fraudsters not being caught: In answer to my written Parliamentary Questions last year, the Government’s replies indicated current protective mechanisms are not working adequately. Data from ‘Action Fraud’ (the national centre for fraud and cybercrime) and its National Fraud Intelligence Bureau showed that over two thousand frauds had been reported since 2014, but only 7 suspects have been summonsed or charged in connection with these and no convictions.

    Government relying on Action Fraud is not enough: When asked why mortgage cold calling can be banned but not pensions, showed insufficient concern for protecting the public. Its reasons included suggesting it wanted to wait and see whether Caller Line Identification measures would work, but just knowing the phone number of a cold caller is no protection against a scam. The Government’s replies also claim that Action Fraud ensures the public ‘has the information they need to protect themselves from telephone fraud. Action Fraud, for example places an alert on its website when a serious threat or new type of fraud is identified – which members of the public can sign up to receive by email’. This is clearly not much of a protection for the public, especially as many older people are not even on line and would not know to ask for information until after they had been scammed!

    More concern for companies than the public: The replies said ‘We are determined to tackle the scourge of nuisance calls especially those of a fraudulent nature. Our efforts are focused on taking action against companies that are deliberating breaking the rules, rather than penalising legitimate businesses who comply with the law.’ But no reputable company should need to contact the public out of the blue – they can find better ways to generate business.

    Let’s not miss another opportunity to get cold calling banned: Having missed the chance to do this when the Pensions Act went through Parliament last year, let’s take this new opportunity to finally put in place much needed measures to protect people’s money from fraudulent firms. As the Financial Guidance and Claims Bill is passing through Parliament now, there was strong support across the House for banning cold calling by Claims Management Companies, and for pensions too.

    It is important for people to know that no reputable firm will cold call about their pension. A ban would send a strong signal to the public that if someone contacts them out of the blue to discuss their pension, they should ‘Just Hang Up’. If they receive unsolicited texts or emails, ‘just delete them’. The friendly person offering a free review will probably be out to take their money and will not have their interests at heart. A ban would make the situation clear. When it comes to mortgages, customers can only be approached if they have expressly requested contact from the company by name. Just ticking a generic box about financial promotions would not make the approach legal. Doing the same for other financial transactions would be an enormous step forward in protecting the public.

    Public should always check with PensionWise:  In the meantime, there are not many effective ways of informing the public. One piece of advice would be to always check with PensionWise or an adviser before handing over pension money to a firm they don’t know. The best advice is to ignore any approaches that come out of the blue, so they don’t fall for such scams.

    Act now: If the Government really is serious about protecting the public and stopping more scams, then it could seize the opportunity offered by the legislation to act, rather than endlessly consulting while unsuspecting people lose more money. I will be laying amendments to the Bill to try to get this enacted more quickly. There is no other obvious legislative vehicle in the Queen’s Speech that would enable a ban to be introduced in the next two years and as Brexit legislation will dominate, this Bill is an ideal opportunity to finally act.

    Here are links to some of the questions I have asked and the responses provided




    Leave a Reply

    Your email address will not be published. Required fields are marked *