IFANov 22 2016

Push to ban cold-calling nears success

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Push to ban cold-calling nears success

Advisers and savings industry figures have rallied behind a bid to outlaw pension or investment cold-calling to protect consumers from being scammed.

A campaign started in September by Darren Cooke, director at Red Circle Financial Planning, involves a parliamentary petition and has since expanded to include a website: bancoldcalling.co.uk.

The website has attracted high-profile supporters such as former pensions ministers Ros Altmann and Royal London’s Steve Webb, as well as consumer expert Martin Lewis. This is in addition to backing from a number of adviser firms and large institutions such as Standard Life.

The petition has gathered more than 7,500 signatures so far. The government will be forced to respond if numbers pass 10,000, but it may act sooner: Lord Yong (in the House of Lords) said at the start of November that he expected action “within weeks”, and hopes are growing that the Autumn Statement could detail concrete action.

Chris Foster, partner and IFA at Pennines Independent Financial Advisers, said of the petition: “It’s just too easy for people to target the financially naïve, and of course with cold-calling, the minute they get someone to bite it’s goodbye to your money.”

Noting that the number of scammers has increased in the aftermath of pensions freedoms, Mr Foster added: “If you chuck enough mud at the wall some will stick.”

In July, the BBC’s Panorama programme Pensions Rip-Offs Exposed highlighted how unscrupulous firms were taking advantage of the reforms, seeking to coax consumers into transferring benefits to unregulated schemes.

Mr Cooke, who has dealt with many victims himself, said the programme inspired him to take more concrete action.

 “I just felt something else needed to be done,” he said. “There’s been a lot of talk in our industry that cold-calling is the approach these scammers use first to approach clients. I came to the conclusion that if we make cold-calling illegal that surely cuts them off at the source.”

Phil Stevenson, an adviser who was featured on the programme helping a scam victim, has since received floods of requests from further victims looking for assistance. Mr Stevenson said he had directed many enquiries, which came from around the country, to their local IFA.

The FCA has regularly reiterated its stance that tackling pension scams is a key area of focus. In April, it published 10 steps to avoid unauthorised firms on its website. 

However, not everyone is convinced that the regulator is doing enough.

“The FCA demonstrably does nothing about this,” said Mr Foster. “While it’s investigating, real people are losing real money,” he added.

Mr Cooke explained that making the public aware of scamming activities is of equal importance to enforcement action. 

“The ban in itself won’t necessarily do anything – these people are already criminals,” he said.

“It’s about making people aware that if they get that cold-call, that person is already a criminal. So it’s probably not going to end well for your pension or investment. Just hang up.”

Mr Cooke’s parliamentary petition can be found at https://petition.parliament.uk/petitions/166980

craig.rickman@ft.com