The Government has finally confirmed that a ban on pensions cold calling – including text and email communications – should be implemented as early as June this year, adding that it will monitor whether this could be expanded into other financial products.
The move follows amendments to the Financial Guidance & Claims Bill, which is due to reach the House of Commons report stage next week.
The Work & Pensions Committee said the amendments brought the Bill into line with its recommendations designed to protect pensioners against scams and boost the take-up of free independent pensions guidance.
Breaches of the legislation, which will be policed by the Information Commissioner’s Office, could trigger fines of up to £500,000.
There will be two exemptions from the proposed ban to ensure legitimate businesses are not affected – calls where consumers have expressly requested information from a firm and those where an existing client relationship exists.
Work & Pensions Committee chair Frank Field said: “The Government is now almost there, within spitting distance of what the committee proposed. I am delighted that they will be bringing forward a ban on pensions cold calling by June, as we called for. This represents a major leap forward in the urgent fight to protect pensioners’ savings against scams and sharp practice.”
However, Tom Selby, senior analyst at AJ Bell, warned: “The reality is scammers are becoming increasingly sophisticated and in the time it has taken policymakers to introduce this ban, tactics have evolved. We have always said a cold-calling ban should be viewed as the beginning of the onslaught on pension scammers, and we urge the Government and regulators to consider further interventions to protect savers.
“Hundreds of millions of pounds has been lost by people using their pensions to invest in unregulated schemes that remain at the heart of many recent scandals. Introducing a permitted investments list for SIPPs so such investments are no longer allowed would be a huge step forward in tackling the scourge of pensions fraud.”
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