Pension Freedom  

Government promises cold calling ban before 2020

Government promises cold calling ban before 2020

The government is working on legislation to make sure that the cold calling ban will be in place before 2020.

However, MP Stephen Barclay, economic secretary to the Treasury, declined to give a precise date on when the new legislation will come into force.

At a hearing for the pension freedoms inquiry launched by the Work and Pensions Committee, Mr Barclay said that the reason why the government is presenting draft legislation on this matter early next year is because it has “an ambition of doing it before 2020”.

He said: “In politics, people give commitments that are not met. We want to get the legislation right, because there is some degree of complexity within it.

“The question isn’t a lack of desire to address scams, the question is how we land the legislation in the right way.”

The government's plan to introduce a ban on cold-callers who try to scam people out of their pension savings, which will include emails and texts, was announced on 21 August.

It will be enforced by the Information Commissioner’s Office (ICO).

Mr Barclay argued that “the devil is in the detail” when it comes to cold calling, since “there is a range of ways by which people are being contacted”.

He said: "We need to differentiate between legitimate businesses, that may want to market directly, from those that are illegitimate."

The advantage of the government drafting primary legislation instead of the amendment proposed by the House of Lords to enforce cold calling is the timeline.

In October, the House of Lords approved three amendments to the Financial Guidance and Claims Bill – legislation which will create the single financial guidance body (SFGB), which will merge Pension Wise, The Pensions Advisory Service and The Money Advice Service – giving this new organisation more powers to fight pensions cold calling.

However, if cold calling is only addressed through this amendment, it would mean that it won’t be in place before 2020, Mr Barclay argued.

Nevertheless, Guy Opperman, minister for pensions and financial inclusion, said at the hearing that the amendments will be considered.

He said: “The intention at the present stage is not to fundamentally amend anything that comes from their Lordships.”

He said, however, that he isn’t sure that the current text of the amendments is “the right terminology going forward,” and that the government is considering these on “an ongoing basis”.

The government is also analysing other changes to the Bill, which will make mandatory for trustees and providers to refer members transferring out their pensions to Pension Wise.

Mr Opperman said: “It is our proposal to consider it, sit down with the [Financial Conduct Authority] FCA and consider it with Parliament, because we are not totally convinced that the wording is ultimately as it should be.”