An influential Parliamentary committee has reinforced fears that rogue marketers could turn the reform of the pensions market into yet another mis-selling scandal in a new report which slams the Government’s lack of action.
Back in March, just weeks before the reforms came into force, two direct marketing firms – Targeted Response Direct and B2C Data (a DMA member) – were accused of selling pensioners’ personal data – including income, the value of the investments and the size of their pensions without their consent.
At the time, the Information Commissioner’s Office head of enforcement Steve Eckersley described the claims as “very worrying”, and pledged to investigate.
The move also prompted the DMA to launch a pensions marketing toolkit amid fears that legitimate direct marketing will once again be dragged through the gutter.
Now, the House of Commons Work & Pensions Committee has published a report into the new system, which allows those aged 55 and over to access their pensions. It says that the scheme is “not yet operating entirely as it should” and a lack of clarity is “endangering pension savers”.
It said: “To not provide the basis for a well-informed choice could lead to the next major pensions mis-selling scandal.”
The Committee is demanding improvements to guidance and advice and urged the Government to do more to highlight the dangers of pension scams.
A free guidance service – Pension Wise – was introduced alongside the reforms; it offers a one-off 45-minute guidance session in person or over the telephone, as well as offering information online.
But the Committee described the Pension Wise website as “not fit for purpose”, adding: “It is static, offering no opportunities for personalisation, and lags well behind many private services.” It said this was particularly concerning given that the website is the main guidance channel for many consumers.
As a “matter of urgency”, the Government must ensure the website provides a calculator so consumers can work out what their income might be, the report said, as well as examples tailored to people’s individual circumstances.
Committee chair Frank Field said: “These reforms have been in operation for six months now: it is evident that that has been long enough for the scammers to get going, working on defrauding people out of their life savings – it should be long enough for the Government to have published some data about how the reforms and the attendant guidance and advice are working.”
He continued: “We have seen all too clearly, too many times, what happens when financial information is not properly provided and regulated. We literally cannot afford another financial mis-selling scandal.”
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