The Government has finally, belatedly, introduced a ban on pensions cold-calling as it attempts to tackle the scourge of retirement scams.
While the move has been welcomed by many, some are sceptical about whether it will really do anything to deter fraudsters.
BBC Radio 4 MoneyBox presenter Paul Lewis is probably the most high profile critic.
Last week, he tweeted: “The pension cold call ban will not apply to texts, emails, or social media, just phone calls. It will not apply to calls from abroad. It will not apply to calls from firms you have dealt with. It will not apply to calls about other investments. It will not work.”
Mr Lewis is correct to say the regulations that came into force on January 9 do not specifically cover text messages or emails.
The Treasury, however, believes provisions in the Privacy and Electronic Communications Regulations 2003 (PECR) – specifically Regulation 22 – provide sufficient protection for savers. These rules prevent firms sending direct marketing text messages unless the recipient has consented to receiving those messages or has obtained the contact details through the sale of a product or service, is marketing in relation to a similar product and has given the recipient a simple means of refusing the messages.
Whether Regulation 22 is sufficiently effective in banning cold-call texts and emails is open to debate – it certainly doesn’t seem to have deterred crooks from using this avenue to date.
Ultimately it may end up being the courts that define the scope of these particular regulations.
Mr Lewis is also spot on in saying the cold-call ban does not cover social media – although I’m not sure it is realistic or practical to expect this.
The ability (or otherwise) of governments to police the activity of giant companies like Google, Facebook and Twitter is a debate that goes far beyond pension scams.
Policing the internet is pretty much impossible, although governments can play a role in pressuring these firms to take greater responsibility in vetting the adverts and ‘sponsored content’.
On calls from abroad, again Mr Lewis has got it right. Firms may set up call centres in other countries in order to circumvent the ban, and clearly it is impossible for the UK government to stop this.
However, I would argue that firms being forced to do this is evidence the ban is having some impact.
On investments, the regulations will have at least some application – the ban covers cold calls aimed at encouraging people to withdraw from pensions for investments outside of the scheme.
This is of critical importance as the majority of pension scam activity since April 2015 has focused on coercing people to take their money out of the pension wrapper for investment.
Ultimately whether or not the ban is judged a success or failure perhaps depends on your perspective. If you expected it to stop criminals committing crimes or eradicate scam activity overnight, prepare to be disappointed.