Pensions  

Govt outlines concerns behind cold-calling ban

Govt outlines concerns behind cold-calling ban

HM Treasury has opened its consultation on banning pensions cold-calling, after formally announcing last week (12 July) that the ban will not happen anytime soon.

The consultation centres on five themes the government is seeking industry feedback on before it can go ahead with the ban.

It wants to know if industry agrees with its proposals to restrict all unsolicited direct marketing calls in relation to pensions.

It also concerned about whether the proposed regulations are sufficiently broad to discourage scammers and whether they are sufficiently flexible to address any attempt by scammers to circumnavigate the rules.

Finally, it asks industry to think about the likely "quantifiable impact" of the ban on the business of legitimate firms that undertake cold calling.

The consultation will close in mid August, when the government will table amendments before outlining proposed regulations to parliament in autumn.

In recent months, financial advisers have become increasingly frustrated about the time it has taken to put a ban on cold calling in place, with some claiming that government procrastination will allow scammers more time to take advantage of vulnerable savers.

As FTAdviser previously reported, the government was required to either introduce the ban by the end of June, or explain to parliament why this had not happened.

It confirmed last week (12 July) that due to the "complexity" of the issue it had failed to meet the deadline.

Last month, the Liberal Democrats’ work & pensions spokesman, Stephen Lloyd, criticised the work & pensions secretary Esther McVey, for failing to act more quickly in enacting a ban.

However, in today’s consultation statement, the Treasury said that a consultation was needed because it was important to consider that some companies made 'cold calls' for legitimate business reasons.

It said: "Not all businesses which undertake pensions cold calling are doing so with a view to scamming customers.

"It is important to understand what the impact on the small number of firms undertaking legitimate pensions cold calls may be."

Reacting to today’s consultation, industry figures seized on the government’s hesitation to issue an out-and-out ban, saying the delay was handing criminals a greater window of opportunity.

Helen Morrissey, pension specialist at Royal London said "with every day that passes more people are being targeted by scammers".

She explained: "We need to get this ban in place as soon as possible. The consultation says it seeks 'final views' with the intention being to lay the regulations before both houses of parliament in autumn 2018 'subject to Parliamentary timetabling.'

"We urge the government not to let the timetable slip any further on this vital issue."

Jon Greer, head of retirement policy at Quilter, said: "News of a delay to cold calling ban had people throwing their hands up in the air with frustration.

"While less than ideal, it’s encouraging the government is at least using the time to get to grips with some of the nuances and complications of a cold calling ban."