RegulationJun 18 2018

Pension cold calling ban might be delayed

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Pension cold calling ban might be delayed

The government is still working on the June deadline to present new regulation which will ban pension-related cold calls.

However, FTAdviser understands that it has been difficult to get the Parliamentary time necessary to table a debate in the House of Commons, which is needed to introduce the new legislation.

In March, HM Treasury introduced an amendment to the Financial Claims and Guidance Act 2018 that stated regulations underpinning the ban on pension-related cold calls should be made by the secretary of state before the end of June.

If the power is not exercised by the end of the month, the secretary of state for Work & Pensions, currently MP for Tatton Esther McVey, must explain to parliament why not.

The amendment stated: "The secretary of state may make regulations prohibiting unsolicited direct marketing relating to pensions.

"If before the end of June in any year the secretary of state has not made regulations under this section (whether or not in that year), the secretary of state must publish a statement, by the end of July in that year, explaining why regulations have not been made and setting a timetable for making the regulations, and lay the statement before each House of Parliament."

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 in August.

It will be enforced by the Information Commissioner’s Office (ICO), which recently received new powers to fine bosses of companies which plague people with unsolicited cold calls by as much as £500,000.

According to Tom Selby, senior analyst of AJ Bell, "18 months of prevarication" have passed since the government announced its intended clampdown on pension scams.

So, the announcement regulations would be in place by June was a welcome, if belated, statement of intent, he argued.

He said: "However, Brexit is clearly dominating the legislative agenda and the government now faces a race against time to get the new rules in place ahead of this self-imposed deadline.

"Failure to do so would be acutely embarrassing for the secretary of state, who could have to stand before Parliament to explain why this target has not been achieved."

Mr Selby added that he hopes "any delay is purely down to a lack of Parliamentary time rather than anything more sinister".

He said: "Ultimately the cold-calling ban should just be the start of the process to tackle pension fraudsters, and every day it isn't implemented savers are left unnecessarily exposed to scammers who employ this tactic."

Some experts have warned that the cold-calling ban will not stop pension scams because scammers will find different ways of contacting their victims.