A pension scheme authorisation process would be more effective than a cold calling ban, the Pensions and Lifetime Savings Association (PLSA) has said in response to a government’s consultation.
Today marks the submission deadline for the consultation on the government's proposed cold calling ban which would see an outright ban on unsolicited calls, texts and emails.
The PLSA's response to the consultation expressed concern that a cold calling ban would not be a "silver bullet" and the government should be more ambitious.
The trade body said scammers would still be able to carry out cold calling from overseas, where the ban doesn’t apply.
The PLSA has said the government’s approach did not address the central problem which was that a registered pension scheme did not equal a legitimate scheme.
The association called for the government to introduce an authorisation regime to stop rogue firms from entering the market and to tackle scammers using existing schemes as a vehicle for their activities.
James Walsh, policy lead of engagement, EU and regulation at the PLSA, said: "Cold calling is one of the main methods used by scammers preying on vulnerable people, so the government’s plan to ban cold calling is a much-needed step towards making life more difficult for scammers.
"However, we need a more ambitious approach from the government if we are to fully protect savers. We are calling for the government to gradually introduce an authorisation regime for pension schemes.
"The most pressing problem area at present is small schemes, so that is where we would start, but in the long-term we would expect all schemes who want to accept transfers to be authorised."
While the ban was welcomed by the market, providers said the government was lacking a focus on possible loopholes which might allow scammers to circumvent the regulation.
Royal London has said scammers would still be able to target people through social media after a cold calling ban had been put into place.
Sir Steve Webb, director of policy at Royal London, said: "When we raise with them the issue of emails, texts etc they say that this is already covered by the existing legislation.
"When you look at that legislation - the Privacy and Electronic Communications regulations - you discover that they cover emails and fax machines - but not social media. So scammers won’t see any change in their ability to use targeted social media to trap people."
The government was also criticised for only lightly amending the existing rules around electronic communication. Pensions expert and former minister Baroness Altmann said cold calling would still be allowed in some cases.
She said: "No doubt the Treasury and DWP have good intentions, but the proposed changes are little more than minor tweaks to existing rules which are clearly ineffective, with heavier penalties if the perpetrators are caught.
"The new rules will still rely on the Information Commissioner’s Office to implement the ban and, unhelpfully, cold-calling in some circumstances will still be allowed.
"That makes it impossible to tell people that all unsolicited approaches are against the law. For example, calling someone and claiming to be from their pension provider would be an easy way to circumvent the new ban."
In response to the government's consultation, Kate Smith, head of pensions at Aegon, said: "Our concern is how will consumers distinguish between a genuine call about their pension and the banned pension cold-call.
"Unless the government has a public awareness campaign to help consumers know about this, the ban has the potential to create confusion stopping genuine calls getting through."
rosie.quigley@ft.com
