Chancellor Philip Hammond has confirmed that the Government will launch a consultation on how best to ban pensions cold calling in what many will see as a potentially fatal blow to the outbound telemarketing industry.
While stopping short of banning cold calling outright, the plans are likely to set off alarm bells, as once one sector is outlawed, the ban could easily be expanded to other areas.
The move was first disclosed two weeks ago when Lord Young, the Conservative peer and Treasury spokesman in the Lords, said that there will be an “announcement” within weeks, adding that he expected it would “meet expectations”.
It followed a Parliamentary petition launched by a financial adviser, which put the issue into the spotlight two months ago and support for the change from leading financial services companies, including Royal London.
The ban will stretch to the cold calling of people who have inadvertently opted in to receiving third party communications. Violation of the ban could attract fines of up to £500,000.
There has been mounting evidence that fraudsters are using the pension freedoms to trick people into parting with their life savings by cold calling them with offers of “once in a lifetime” investment opportunities.
Police recently disclosed that reported fraud has risen from £10m in the year before the pension freedoms were introduced, to £18m in the year after.
The Treasury stated the ban on cold calling would “help bring an end to the misery brought about by the 250 million scam calls that happen every year in the UK – eight every second – and builds on the government’s ambitions to make sure this county works for everyone”.
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