The Financial Conduct Authority (FCA) has been called on to be stricter on authorised firms that use leads generated by cold calling, following the launch of its ScamSmart campaign with The Pension Regulator.
David Hickson, campaigner at Fair Telecoms, said the FCA was in a position to ban authorised firms from using leads generated by cold calling.
The government is currently consulting on banning cold calling on pensions but Mr Hickson said the regulator should also do more to put an end to scams.
Mr Hickson said: "One thing that the FCA can do that the government can’t is take on businesses that use leads generated by cold callers.
"Cold calling is often carried out by nimble companies that operate overseas, where they are outside of jurisdiction. These companies cold call people, gather leads and flog them to authorised businesses.
"The FCA could write into its code a rule which states that authorised businesses are not allowed to write business on the back of these leads."
Last week (14 August) the FCA and TPR launched a scam awareness campaign after they found scam victims had lost on average £91,000 each last year.
The FCA and TPR had identified cold calling as the main method of scamming, together with post and email scams, and warned the offer of a 'free pension review' was a common tactic used by fraudsters that many pension holders were unaware of.
Mr Hickson said: "The FCA wants people to look up cold callers in a directory and then contact them to report them for cold calling.
"Rather than spending millions on a campaign, the regulator should ban it completely, but it hasn’t said why it won’t. However, because cold calling is such a big marketing tool, there is a danger that a total ban could be seen as being anti-competition."
In a statement the FCA said: "We have made it clear to firms that we regulate how we expect them to behave in respect of accepting business and we already have the power to take action against firms who do not comply and have used these."
The government was due to outlaw pension cold calling in June but admitted in July it had failed to meet the deadline due to the "complexity" of the issue at hand. It launched a consultation instead.
However, some have pointed out cold calling will still be legal in some instances, even after the government has introduced its proposed ban.
Ros Altmann, previous pensions minister, said: "The current plan is to allow cold calling in some circumstances, such as if the caller doesn't 'intend' to scam, or if the person has a relationship with the company.
"Scammers could call someone out of the blue claiming to want to talk about their 'Aviva' pension or 'Legal and General' etc. The probability is that a good proportion of such random calls will find customers of those companies who won't realise this is just a lead generator for another firm."
She warned: "The messages to customers need to be clear - nobody is allowed to call you out of the blue about pensions. If you request a call that's fine. If your pension firm wants to reach you they can write and quote your policy number."
The Pensions and Lifetime Savings Association (PLSA) has meanwhile urged ministers to go a step beyond simply banning pension cold-calling, saying scammers would still be able to carry out cold calling from overseas, where the ban doesn’t apply.
It called for a pension scheme authorisation process to stop rogue firms from entering the market and to tackle scammers using existing schemes as a vehicle for their activities.
The campaign partnership between the FCA and TRP is part of an anti-pension scamming task force - Project Bloom - in which the Department for Work and Pensions, HM Treasury and the City of London Police are taking part.
Ricky Chan, director and financial planner at IFS Wealth and Pensions, said a public awareness campaign played an important part in tackling cold calling, but increased awareness of where to find good quality, regulated financial advisers was equally important in tackling this issue.
He said: "An outright 'cold calling ban' goes some way to reducing scams but it certainly isn’t the 'be all and end all'.
"This is because pension scams are generally committed by unregulated outfits, hence logically, if they already know they’re committing a crime, why would they care to abide by a cold calling ban."
"The advert does well to highlight potential scams and [for people] to visit the FCA ScamSmart website, but it needs to direct clients to where to find either guidance or regulated advice."
Consumer group Which is calling on the government to give new powers to the Information Commissioner’s Office to introduce fines of up to £500,000 for company bosses whose firms plague people with unsolicited cold calls.
Which alleged organisations that have been penalised often try to wriggle out of paying financial penalties by declaring bankruptcy – only to sidestep the law and open up again under a different name.
In October 2016, the government announced measures to fine directors of cold calling companies and said the these fines would be introduced by spring 2017.
But delays meant the Department for Digital, Culture, Media and Sport launched its consultation into the proposed fines in May of this year and the consultation closed today (21 August).
rosie.quigley@ft.com
