Communications essential as cold-calling ban takes step forward

A consultation document outlines the government’s plans to amend privacy regulations to implement the ban, which due to existing restrictions on electronic messaging will only apply to live telephone calls.

It also further outlines the scope and exemptions to the ban, which will prohibit any “unsolicited direct marketing calls relating to pensions products and services” unless there is an existing client relationship or the recipient of the call has given specific consent.

This is better than doing nothing, but it’s far from a complete solution

Ian Neale, Aries Insight

Exemptions, which will only be available to firms regulated by the Financial Conduct Authority or those who work for schemes overseen by the Pensions Regulator, will cover activities such as third-party administration and locating members.

Delays concern industry

While the ban has long been championed in virtually all corners of the pensions industry, the delays involved in its implementation have some worried that it has slipped down the legislative agenda.

The DWP originally wanted it in force by June this year, but now it states its intention to have the policy in place in Autumn this year, “subject to Parliamentary timetabling”.

With Brexit and a narrow majority occupying the government’s mind, some fear lesser priorities may fall by the wayside.

“You could see [the delivery date] slip further, but I really hope it doesn’t,” said Helen Morrissey, personal finance specialist at Royal London, adding that “kicking the can down the road” leads to more people getting scammed.

Comms effort vital to success

Few experts expect the ban to be completely watertight. As with all UK legislation, the ban will have no impact on scammers operating in foreign countries.

“This is better than doing nothing, but it’s far from a complete solution,” said Ian Neale, director at pensions intelligence company Aries Insight. “A determined scammer, and there are plenty of them, they’re not going to go away because this is a huge honeypot for them.”

Neale expressed specific concerns about the wording of an exemption allowing companies who have an existing relationship with one user of a phone line to contact others sharing that number, and said the Information Commissioner’s Office’s style of enforcement could see many scammed before it takes action.

“What we’ve seen in the past via their own reports is that they have effectively waited until they have compiled hundreds and thousands of reports… they won’t take on one or two reports.”

However, many in the industry see the ban’s primary benefit as a platform from which a robust campaign of communication can be launched, telling members that any unsolicited call about their pension should probably be ignored.

"You’re never going to stop this entirely,” said Tom McPhail, head of retirement policy at Hargreaves Lansdown. “The value of this lies in the messaging and the platform that it gives the government, the media and the industry to give this unequivocal message to consumers.”

Guidance body could lead campaign

Evidence suggests that consumers are currently poor at spotting the tell-tale signs of a pension scam. Research by Citizens Advice found that while 76 per cent of people think themselves to be wise to potential scams, a staggering 88 per cent fell for common scam techniques.

Jonathan Watts-Lay, director at advice company Wealth at Work, agreed that the ban would present a good opportunity to teach simple lessons, such as not to pursue offers with time limits, or those that appear “too good to be true”.

He said the new single financial guidance body would be an ideal candidate to spearhead the campaign.

“We don’t know completely what that looks like but I’d have thought that was a great vehicle to create public awareness around some of these issues,” he said, adding that employers, trustees and providers all have a role to play.