Regulation  

Brexit could undermine cold calling ban

Brexit could undermine cold calling ban

The proposed cold calling ban could be undermined by Brexit, as current strategies for co-operation between countries might not be in place after the UK leaves the European Union, the Pensions Management Institute (PMI) has warned.

In its response to the HM Treasury consultation which closed last week (17 August), the professional body said scammers were likely to develop workarounds to any rules imposed on them, such as setting up base outside of the UK and targeting people across the border.

It stated: "The first and most obvious concern is that scammers could base themselves outside the UK and so be beyond the scope of British jurisdiction.

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"It may perhaps be premature to consider a post-Brexit regulatory culture, but with the UK outside the EU, existing structures for regulatory co-operation would be compromised if not lost altogether."

Other pension specialists are also concerned about the potential effect of the UK leaving the EU, which will happen on 19 March 2019.

Kate Smith, head of pensions at Aegon, told FTAdviser the Information Commissioner’s Office (ICO), in charge of enforcing the ban, was apparently working with other regulators in Europe to stop scammers cold calling UK residents.

She said: "Whether this continues post Brexit is yet to be seen. Whatever happens, the ICO needs to publish a list of banned overseas scammers and alert people to this and make every effort to work with overseas regulators."

On the other hand, Tom Selby, senior analyst at AJ Bell, said he was not convinced Brexit would be "materially detrimental" to the fight against pension fraud and cold-calling.

He said: "The Financial Conduct Authority has struck co-operation agreements with regulatory authorities around the world already, and there is no reason it can’t work with regulators and policymakers in countries both inside and outside the EU to tighten the noose around companies that look to flout the cold-calling ban.

"To my mind this is an individual country issue rather than an EU issue. It is up to the UK to put in the hard yards working with other countries to ensure the crackdown is as effective as possible."

The government's plan to introduce a ban on pension cold-calls, which will include emails and texts, was announced in August 2017.

The ban was due to be in place by June but in July the government admitted it had failed to meet the deadline due to the "complexity" of the issue at hand.

In the meantime, it launched a consultation, and will now table amendments before outlining proposed regulations to parliament in autumn.

maria.espadinha@ft.com