The Government has finally outlawed pensions cold calling – two years after the ban was first announced – with companies which break the rules now facing fines of up to £500,000.
The law comes into effect today, and will be policed by the Information Commissioner’s Office, which welcomed the move, claiming the issue “causes untold misery to thousands of people”.
First announced by Chancellor Philip Hammond in November 2016, the cold calling ban has been repeatedly pushed back. It was originally expected before the end of 2017 before being delayed to the summer of 2018 and then again to the autumn.
The ban does not apply to callers who are regulated by the Financial Conduct Authority (FCA) or to the trustee or manager of an occupational or personal pension scheme.
Calls from people or companies who have an existing relationship with the caller are also still allowed.
John Glen, Economic Secretary to the Treasury, said: “Pension scammers are the lowest of the low. They rob savers of their hard-earned retirement and devastate lives. We know that cold-calling is the pension scammers’ main tactic, which is why we’ve made them illegal.
“If you receive an unwanted call from an unknown caller about your pension, get as much information you can and report it to the ICO. I’d also urge all savers to seek independent advice if you’re thinking about making an important financial decision.”
Research by the Money Advice Service suggests that there could be as many as eight scam calls every second, the equivalent of 250 million calls per year.
However, not everyone is convinced the ban will be effective. Tom Selby, a senior analyst at pensions firm AJ Bell, said the new action is an important step forward to beating pension scammers, but does not erase the issue permanently.
He added: “Prohibiting cold-calling is only part of the solution and will by no means eradicate the threat of scam activity altogether. Pensions remain a juicy target for fraudsters and some will inevitably look to circumvent the ban or simply ignore it altogether.”
Others have long pointed out that the ban could result in more cold calls – not less – as it would move compliant users of outbound calling out of the way to leave the field clear for rogues to expand activity into.
At the time the ban was first proposed, the Telephone Compliance Council said: “Fraudsters are not going to be hindered by telemarketing regulation, and rogue companies fold and start under a new name, or if they are based overseas cannot be touched by UK authorities.”
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